Jakarta, Indonesia Sentinel — Finance Minister Purbaya Yudhi Sadewa pledged to step up efforts against illegal cigarettes sales, which he said were undermining both state revenue and the domestic tobacco industry.
“I will go to East Java and talk directly with the industry to see whether production is declining. If it is, I will protect their market by cracking down on untaxed and counterfeit cigarettes being sold, particularly online,” Purbaya said, Friday (September 19).
He said he had ordered his ministry to begin monitoring the trade of illicit cigarettes, especially on digital platforms. Legal cigarette producers, he noted, already contribute significantly to state coffers through excise duties, while illicit products weaken competitiveness and erode revenue.
“It’s not fair to collect hundreds of trillions of rupiah in taxes from the cigarette industry while leaving their market unprotected. If we don’t act, we’re essentially killing our own industry,” Purbaya said.
The minister added that tobacco excise policy must also take into account its impact on employment, warning that excessively high excise rates could weaken the industry and trigger mass layoffs. He acknowledged that raising excise is aimed not only at boosting state revenue but also at curbing consumption.
“People must understand the health risks of smoking. But policy cannot be designed in a way that destroys the industry and leaves workers without government support,” he said.
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In addition to tackling illegal cigarettes, Purbaya said his ministry was investigating alleged manipulation and forgery of excise stamps, which have cost the state significant revenue. He said the government was still calculating potential gains from eliminating counterfeit excise and was conducting field analysis before moving forward.
Deputy Finance Minister Anggito Abimanyu confirmed that the Finance Ministry is still reviewing allegations of excise fraud.
