Minister of Finance Purbaya Prepares Additional Cigarette Excise Tariff Layer in 2026

JAKARTA. The government plans to once again change the cigarette excise tariff structure starting in 2026. Minister of Finance Purbaya Yudhi Sadewa revealed a plan to add one tariff layer as part of efforts to regulate the tobacco products industry.

According to Purbaya, this policy is designed to create room for illegal cigarette businesses to enter the formal channel and operate legally. With the additional layer, these businesses are expected to have a tariff scheme that better matches their business capacity.

“We will ensure one new layer, although it is still under discussion. This is to provide room for illegal players to become legal,” Purbaya told reporters in Jakarta on Wednesday (14/1), as quoted by kontan.co.id.

The former Chairman of the Board of Commissioners of the Indonesia Deposit Insurance Corporation (LPS) emphasized that if illegal cigarette businesses are willing to transform into legal entities, they will be subject to excise obligations accordingly. “So they will also pay taxes later,” Purbaya said.

Purbaya stated that the regulation concerning the additional cigarette excise layer is targeted to be issued soon. He estimated that the technical rules could be released no later than next week.

No Tolerance

However, the government is also preparing firm measures once the policy is implemented. Purbaya stressed that there will be no tolerance for businesses that continue illegal cigarette activities after the new tariff scheme becomes available.

“After that layer is issued, once the regulation comes out, maybe next week, if they still play around, I will crack down on all of them. There will be no mercy,” he asserted.

For context, since 2022, the government has simplified the cigarette excise tariff structure from 10 layers to 8 layers. If this plan is realized, the number of tariff layers will increase again to 9 starting next year.

This policy is expected not only to improve business compliance but also to expand the state revenue base from the cigarette excise sector while simultaneously suppressing the circulation of illegal cigarettes. (KEN)