No Excise Tariff Hike in 2026: Cigarette Factory Association Responds

JAKARTA, DDTCnews - The Association of Indonesian Cigarette Factories (Gabungan Perserikatan Pabrik Rokok Indonesia/Gappri in Indonesian) has expressed support for the Ministry of Finance's (MoF's) decision not to raise tobacco excise tariffs in 2026.

Gappri Chairperson, Henry Najian, believes the decision will afford protection to millions of workers whose livelihoods depend on the tobacco products industry.

"The clove cigarette industry is a strategic national sector employing approximately 5.8 million people, ranging from tobacco farmers and factory workers to distributors," said Henry, as quoted on Friday (3/10/2025).

Although the excise tariffs will not rise, Henry urged the government to review several regulations that are placing pressure on the cigarette industry, most notably Government Regulation (Gov. Reg.) 28/2024, which also restricts the circulation of cigarettes.

In his view, the deliberation of Gov. Reg. 28/2024 was implemented without transparency and with minimal involvement of tobacco products industry stakeholders.

"This has created an imbalance in the resulting legal instrument and has the potential to cause significant negative impacts on the industry and the national economy, which is not in a healthy state," said Henry.

Gappri also urged the government to open inclusive and transparent dialogue to establish fair and balanced regulation without sacrificing particular sectors.

"This is necessary to ensure the sustainability of the industry, protect millions of workers and maintain national economic stability in line with President Prabowo's Asta Cita," said Henry.

For information, Minister of Finance, Purbaya Yudhi Sadewa has decided not to raise tobacco excise tariffs next year. A surcharge on excise tariffs was feared to suppress the performance of the tobacco products industry and lead to redundancies.

In addition to not raising excise tariffs, Purbaya will also intensify surveillance and enforcement against illicit cigarettes. The circulation of illicit cigarettes is seen as undermining the performance of legal cigarette factories that dutifully pay their taxes and excise duty to the state treasury.

"They [the cigarette industry associations] say it is sufficient that excise is not rising, whilst I safeguard the market here to prevent domestic and foreign illicit products from dominating the market," said Purbaya. (dik)