Indonesia lawmaker warns tobacco tax shift could weaken crackdown on illegal cigarettes

Commission III DPR member Agung Widyantoro cautioned that proposals to add a new tax tier for Class‑3 tobacco products, aimed at integrating illegal cigarettes into the formal market, could undermine law‑enforcement efforts. He highlighted that the proliferation of illegal cigarette production and distribution erodes state revenue and creates unfair competition, and warned that any fiscal adjustment must keep deterrence as a priority to avoid moral hazard.

Widyantoro stressed that enforcement must remain impartial toward producers, distributors, and facilitators of illicit trade, and called for transparent, accountable monitoring and regular evaluations to ensure new tax measures are not exploited as loopholes granting legitimacy to previously illegal operators. He urged the government to maintain the punitive aspect of violations and to safeguard the rule of law while pursuing revenue optimization.