September 25, 2025
JAKARTA – Finance Minister Purbaya Yudhi Sadewa has announced that the government will take strict action against the circulation of illegal cigarettes, which has affected state revenue due to a significant decline in excise duties.
“We will crack down on those involved, including officials from the Customs Office and Finance Ministry. I hope this problem can be eradicated within the next three months,” Purbaya said during a state budget press conference on Monday.
The minister explained that the director general of customs and excise would be tasked with conducting random inspections of travelers using airport green lanes, which do not require physical baggage checks. Officials have expressed concern that this lane could be exploited by cigarette smugglers to bring tobacco products into the country without paying excise duties.
In addition, Purbaya said he had summoned e-commerce platforms, including Tokopedia and Blibli, urging them to prevent the sale of illegal cigarettes on their marketplaces. Random inspections will also target suppliers such as food stalls and small cigarette kiosks, including those selling single cigarettes in jars.
“We have identified the sellers and will start arresting them, so anyone still selling must stop,” he warned.
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Customs and excise authorities say they have intensified monitoring of excisable goods, with a particular focus on tobacco products.
“This monitoring aims to prevent tobacco products from being sold at unreasonably low prices and to support the government’s excise policies,” said Budi Prasetiyo, head of the public relations and outreach sub-directorate at the customs and excise office, in a statement on Thursday.
The monitoring was carried out in two phases: June and September for traditional tobacco products such as cigarettes, cigars, kretek (clove cigarettes) and shredded tobacco, and in August for electronic cigarettes and other processed tobacco products.
Customs officers visited both modern retail outlets and traditional kiosks to record actual selling prices of various cigarette brands, then compared these prices with the excise rates printed on the tax stamps of each product.
“Illegal cigarettes not only harm state revenue but also have the potential to damage the healthy structure of the tobacco industry. Through outreach programs, assistance and workshops, we are working to improve community and business compliance with regulations,” Budi said.
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Customs and excise authorities have also conducted raids on illegal cigarettes in several regions, including Malang, East Java; Samarinda, East Kalimantan; Parepare, South Sulawesi; Cilacap, Central Java; and Palembang, South Sumatra.
In Malang, officials seized 18.2 million illegal cigarettes between January and September, valued at Rp 27.1 billion, with potential excise losses of Rp 13.6 billion. The seized cigarettes were produced outside the region, suggesting that Malang serves as a transit route.
In Palembang, a warehouse on Jl. Bukit Baru was raided on Sept. 12, resulting in the seizure of 4.44 million unstamped cigarettes worth an estimated Rp 6.1 billion, preventing around Rp 3.3 billion in potential excise losses.
During a separate media briefing at the Finance Ministry on Friday, Minister Purbaya highlighted that the current cigarette excise rate had reached 57 percent. He described the policy as “unusual” and noted that the high excise rate may be contributing to the proliferation of illegal cigarettes.