Jakarta. Finance Minister Purbaya Yudhi Sadewa vowed on Monday to crack down on the country’s thriving trade in illegal cigarettes, warning that anyone involved, including officials in his own ministry, will face stern action.

“We will go after everyone involved, even if it means people inside Customs or the Finance Ministry,” Purbaya told reporters at the September edition of the state budget briefing in Jakarta. “I will personally conduct random checks on distribution channels to ensure no illicit products are slipping through the green lanes of our customs system.”

The commitment comes as Indonesia enforces new tobacco excise regulations for 2025 under Finance Ministry Regulations No. 96 and 97 of 2024. The government kept excise tax rates unchanged but raised minimum retail prices across cigarette categories to discourage smuggling and under-the-counter sales. Excise duties now range from Rp 1,231 ($0.08) per stick for premium machine-made clove cigarettes (kretek) to Rp 223 per stick for lower-tier hand-rolled kretek. Imported cigarettes are subject to similar levies, while e-cigarettes face tariffs of up to Rp 6,776 per milliliter.

Illegal cigarettes remain widely available across Indonesia, often sold in small shops at cut-rate prices. Purbaya said his ministry had ordered major e-commerce platforms to immediately block listings for illicit products. He also pledged to visit small retailers directly. “Spread the word: wherever illegal cigarettes are being sold, I will come,” he said.

Indonesia loses an estimated Rp 15 trillion ($940 million) each year in unpaid taxes from illicit cigarette sales, according to Industry Ministry data. Around 22 billion sticks of illegal cigarettes were sold nationwide in 2023, representing 6.9 percent of the country’s total cigarette output. The calculation is based on the average excise duty of Rp 750 per stick.

Despite these losses, tobacco remains a crucial revenue stream. Indonesia’s excise tax collection reached Rp 300.2 trillion in 2024, exceeding the state budget target and marking 4.9 percent year-on-year growth, according to the Customs and Excise Directorate General. Cigarettes contribute roughly 90 percent of all excise tax revenues, far outstripping alcohol and other taxable goods.

Authorities have stepped up enforcement efforts in recent months. On Monday, the Malang Customs office announced the seizure of 18.2 million illegal cigarettes worth Rp 27.1 billion ($1.7 million) from January to September in East Java. Purbaya said he aims to stamp out the bulk of illicit imports within the next three months, citing the typical length of cigarette import cycles.

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