Indonesia lawmaker Said Abdullah urges tax relief for small cigarette makers

Member of Indonesia's House of Representatives Commission XI, Said Abdullah of the PDI‑Perjuangan party, said that the current excise tax (cukai) on Group III cigarettes is overly burdensome for small‑scale producers, especially firms run by entrepreneurs under 20 years old. He warned that high tariffs push many new manufacturers toward illegal tax schemes and called for an affirmative policy that would lower or offset the tax for these producers.

Said noted that the Group III segment—hand‑rolled kretek and white cigarettes—employs more than 186,000 workers in regions such as Madura. He proposed a specific incentive of roughly Rp300 per cigarette stick for qualifying small firms, arguing that the measure would bring illicit operations back into the legal system, increase state revenue and protect jobs. While supporting tax relief, he stressed that firms that continue using fake excise stamps must still face strict penalties.

"We must understand the character of the tobacco industry in our country. In Madura many are in Group III with varied production scales," Said said. "If an affirmative policy is given but illegal tax is still used, heavy sanctions are required," he added.