Workers Face Layoffs as White Cigarette Industry Complains About Excise Tax

Special Adviser to the President on Employment and Labour Welfare, Said Iqbal, has acknowledged receiving numerous complaints from players in the white cigarette or unbranded cigarette industry regarding high excise tariffs. According to him, this issue has the potential to affect business continuity and employment.

Said stated that during discussions with business operators, they admitted they do not refuse to pay excise. However, they consider the current excise tariff to be too high.

“I discussed with them, the illegal cigarette producers are ready to pay excise, but their issue is that the excise is expensive, even though these illegal cigarettes are in demand,” Said said during a virtual press conference on Sunday (28/6/2026).

For this reason, he plans to propose to Minister of Finance Purbaya Yudhi Sadewa that the government evaluate the excise tariff for this segment.

Said revealed that the white cigarette industry currently absorbs hundreds of thousands of workers, ranging from factory workers to tobacco farmers. Tobacco farmers even prefer selling their harvests to white cigarette producers because the purchase price is considered higher compared to large cigarette companies.

“Because they buy at a higher price. If farmers sell to large corporations like PT J or PT GG, the price is lower, so the quality of tobacco in white cigarettes is better,” he said.

He acknowledged that the issue of excise tariffs is not a simple matter. On one hand, the government has an interest in imposing high excise duties to control cigarette consumption. On the other hand, this policy also impacts the sustainability of the industry.