No Increase in Indonesia’s Tobacco Excise Tax in 2026: Minister

Manawir Gojali
Editor Team

Tobacco Indonesia

JAKARTA, HARIANEXPRESS.COM - The Minister of Finance, Sadewa, announced that there will be no increase in Indonesia’s tobacco excise tax rates in 2026, following consultations with key players in the domestic cigarette industry.

During discussions, industry representatives conveyed their preference to maintain the current excise rates, indicating that no changes would suffice for their operational needs. "As long as I do not change the rates, it will be enough for them. Therefore, I will keep the rates unchanged," the minister said.

Sadewa emphasized that the government is preparing alternative strategies to sustain state revenue from the tobacco sector and support the long-term viability of the industry.

One such initiative includes the expansion of tobacco industrial zones, which aim to formalize previously illegal producers, ensuring they contribute fairly to tax revenues. "This measure is not only about protecting large companies but also allowing small producers to join the system," he explained.

To maintain a balanced industry, the government also plans to promote fair business practices while protecting employment. Sadewa rejected proposals from large companies to launch cheaper cigarette products aimed at the market segment of smaller firms, cautioning that such strategies might disrupt the industry balance.

"Our priority is to ensure small companies survive without unfair disruption to the business of larger firms," the minister added.

The expansion of tobacco industrial zones will begin with an assessment of current zones in Kudus, Central Java, and Parepare, South Sulawesi. Subsequent policy formulation will be carried out in coordination with local governments.