Indonesia’s tobacco excise policy ‘ineffective’ 

JAKARTA, Indonesia (MNTV) – The Director General of Customs and Excise of the Indonesian Ministry of Finance, Djaka Budi Utama, says that the Tobacco Excise Policy (CHT) has not effectively reduced cigarette production. 

He conveyed this during a meeting with the House of Representatives (DPR) Commission XI, reports Tempo.

The Ministry of Finance noted that cigarette production until the end of October 2025 reached 258.4 billion sticks, a 2.8 percent decrease year on year. However, the production decline only occurred in group 1, from 138.7 billion sticks to 125.7 billion sticks. 

Group 2 and group 3 production actually increased. Group 2 increased by 3.2 pc from 74.2 billion sticks in October 2024 to 76.5 billion sticks in October 2025. While group 3 increased by 6 pc from 53.1 billion sticks to 56.2 billion sticks.

Djaka believes that society currently disregards brands and tends to seek the cheapest cigarettes. He stated that this hinders the eradication of illegal cigarettes.”’As I mentioned earlier, the important thing for society is that their mouths produce smoke, they do not pay attention to the brand, they also look for the cheapest price,” Djaka said.

Finance Minister Purbaya Yudhi Sadewa has decided not to increase CHT in 2026. This is the second time cigarette excise has not increased after being implemented this year. 

The decision was made by Purbaya after meeting with several cigarette producers who are members of the Union of Indonesian Cigarette Factory Association (Gappri). 

‘They (Gappri) said as long as it is not changed (not raised) it is enough. Well, I won’t change it. Although I was thinking of reducing it (the tariff),” Purbaya said to reporters in September.