Purbaya Confirms Extra Tobacco Excise Brackets This Year
JAKARTA, DDTCNews - Minister of Finance, Purbaya Yudhi Sadewa, has confirmed that the policy to add a tobacco excise (cukai hasil tembakau/CHT in Indonesian) tariff bracket will be implemented in the 2026 fiscal year.
Purbaya said the government would shortly discuss the plan to add a tobacco excise tariff bracket with the House of Representatives (Dewan Perwakilan Rakyat/DPR in Indonesian), once it has finished deliberating higher-priority policies, such as the draft 2027 State Budget (anggaran penerimaan dan belanja negara/APBN), the Law on the Second Amendment to the 2025 State Budget and the Law on the Indonesia International Financial Centre (IIFC).
"We are still occupied with other laws, the State Budget Law and so forth. Once those are done, we will appear before the House, but this year it will be implemented [the addition of the tobacco excise bracket]," he said, as quoted on Wednesday (22/7/2026).
The idea of adding a tobacco excise tariff bracket has been promoted by Purbaya since early January 2026. However, the policy proposal has not yet been formally presented by the government to the House in an official working meeting to date.
"It will be implemented. We will still be meeting with the DPR," said Purbaya.
Purbaya had previously stated that the addition of a tobacco excise tariff bracket aims to attract illegal cigarette producers to operate legally and pay excise duty to the state.
According to him, the circulation of illegal cigarettes should not only be combated through enforcement action and confiscation, but also through the application of new schemes, such as an additional tobacco excise bracket.
He considers this approach preferable to shutting down illegal cigarette production lines that have long absorbed labour. He also projects that the new tobacco excise tariff bracket will ultimately be cheaper.
The plan is for the new tobacco excise tariff bracket to be more expensive than hand-rolled clove cigarettes (sigaret kretek tangan/SKT in Indonesian), but still cheaper than machine-made clove cigarettes (sigaret kretek mesin/SKM in Indonesian). However, the policy proposal, including the scheme and amount of tariffs, is still being finalised by the Ministry of Finance.
On another note, the tobacco excise tariff structure has been simplified from 19 brackets in 2009 to 8 brackets in 2022. However, the tobacco excise brackets were increased again to 9 in 2022 because the rhubarb incense cigarettes (sigaret kelembak kemenyan/KLM in Indonesian) excise tariff bracket became 2 brackets from the previous 1 bracket.
If the government commits to adding 1 tobacco excise tariff bracket this year, the total number of tobacco excise brackets will become 10 brackets. (rig)
