Ministry of Industry Proposes Moratorium on Cigarette Excise Tax Increases Until 2027

The Ministry of Industry (“Kemenperin”) has proposed a moratorium on increases in tobacco product excise (“CHT”) tariffs, or cigarette excise tariffs, through 2027. The proposal was raised during discussions on cigarette excise tariff policy with the Ministry of Finance.  

Merrijanti Punguan Pintaria, Director of the Beverage, Tobacco Products, and Refreshment Industries at the Kemenperin, stated that maintaining current excise tariff is necessary to safeguard the stability and sustainability of the tobacco products industry, which is currently under pressure due to the widespread circulation of illegal cigarettes.

“We have therefore proposed that there be no increases over the next two years,” she told Hukumonline.

According to Merrijanti, the government should prioritize enforcement against the circulation of illegal cigarettes rather than increasing excise tariffs. This is because efforts to eradicate illegal cigarettes are considered capable of increasing state revenue by more than Rp30 trillion.

Meanwhile, the Ministry of Finance is still compiling input and considerations from relevant ministries and agencies before determining its cigarette excise tariff policy.