Tobacco Excise Revenue-Sharing Funds Decline, Purbaya Provides Explanation

Finance Minister Purbaya Yudhi Sadewa has revealed the reasons behind the decline in revenue-sharing funds or DBH for tobacco excise (CHT) to local governments in the 2026 fiscal year. Under Ministry of Finance Regulation (PMK) Number 12 of 2026, the DBH CHT allocation to regions this year is only Rp 3.28 trillion, shrinking by around 48.67% compared to the 2025 fiscal year amount of Rp 6.39 trillion as per PMK 16/2025. Purbaya explained that the drop in DBH CHT value at the start of this year is merely temporary, in line with its seasonal pattern, with the decline occurring only for the first two months of the year, namely January and February 2026. “That’s how it usually is. It will rise again later, that’s the usual pattern. The first two months are like that, then it rises again afterwards,” said Purbaya at his office in Jakarta, quoted on Thursday (26/3/2026). Purbaya stated that the decline in DBH CHT actually offsets the CHT deposits. In the early period of this year, CHT deposits were negative, he said, but began showing growth in March 2026 at 7%. “But March, the last one, has already grown by 7%. So I’ll look at this again later,” he remarked. In addition, Purbaya assured that the central government will continue to intensify enforcement operations against illegal cigarette producers and distributors. The aim is to make CHT deposits more effective, ultimately leading to an increase in tobacco DBH. “Illegal production will shift to legal and add another layer. Once that’s underway, there will be no mercy for the illegals,” he explained. Along with the decline in DBH CHT for the 2026 fiscal year, the amounts received by each region have also shrunk, including for major cigarette-producing regions that have been the largest recipients of DBH year after year. These regions include East Java Province, which receives the largest DBH CHT allocation at Rp 1.85 trillion, Central Java at Rp 764.87 billion, and West Java at Rp 290.20 billion. Last year, East Java received DBH CHT of Rp 3.577 trillion, Central Java Rp 1.46 trillion, and West Java Rp 619.01 billion.