Indonesia plans new tobacco excise tax layer amid smuggling crackdowns

Indonesian Finance Minister Purbaya Yudhi Sadewa has announced plans to propose an additional layer to the Tobacco Product Excise (CHT) tariff. The proposal is currently undergoing study and is slated for discussion with the House of Representatives (DPR RI). While the specific rates have not yet been finalized, the Ministry of Finance has completed the proposal for the new tax layer.

To combat the rise of illegal imports and smuggling, the Ministry plans to increase the operational budget for Customs and Excise. This funding boost aims to enhance the agency's ability to intercept illicit goods and business fraud.

Recent enforcement actions highlight the ongoing struggle against illegal tobacco. In Tanjung Priok, Jakarta, Customs officials intercepted 8.96 million sticks of illegal cigarettes across two containers. Similarly, in West Kalimantan, authorities seized 2.7 million sticks of illegal cigarettes in Kubu Raya, preventing a potential state revenue loss of Rp 2.65 billion.