Ministry of Finance Revises Tax Collection Mechanism for Cigarette

The Ministry of Finance (“Kemenkeu”) is currently preparing a revision to Regulation of the Minister of Finance No.143 of 2023 concerning Procedures for the Collection, Withholding, and Deposit of Cigarette Tax (“PMK 143/2023”). The revision aims to optimize the cigarette tax collection mechanism while increasing state revenue and controlling cigarette consumption.

“The Draft Regulation of the Minister of Finance (“RPMK”) on Procedures for the Collection, Withholding, and Deposit of Cigarette Tax (“RPMK Pajak Rokok”) is currently undergoing a harmonization process among Ministries/Agencies,” stated Nirwala Dwi Heryanto, Director of Communication and Service User Guidance at the Directorate General of Customs and Excise (Direktorat Jenderal Bea Cukai – “DJBC”) of the Kemenkeu.

The key amendments in the RPMK on Cigarette Tax include adjustments to the implementation of Law No. 1 of 2022 on Financial Relations between the Central Government and Regional Governments (“Law 1/2022”), as well as the Law on State Revenue and Expenditure Budget for 2026, which mandates that 2.5% of cigarette tax revenue be allocated for law enforcement in the customs and excise sector. The revisions also cover improvements in the administration of cigarette tax collection and distribution, as well as clarification regarding the earmarking of regional government cigarette tax revenues for other public health services.