Jakarta. Finance Minister Purbaya Yudhi Sadewa has pledged to root out the illegal cigarette trade “to its very core,” vowing that the government’s enforcement efforts will not stop at small retailers but extend to major distributors and corrupt officials who protect them.

The minister made the remarks on Friday after reading public complaints submitted through his online complaints channel “Lapor Pak Purbaya (Report to Mr. Purbaya).” One report from a resident of Karimun, Riau Islands, alleged that customs officers only target small kiosks while allowing large distributors behind the illegal trade to operate freely.

“Hopefully, this report will be followed up on, because it seems Customs has turned a blind eye. These big-time distributors are still operating to this day,” Purbaya said while reading the complaint at the Finance Ministry office in Jakarta.

In response, Purbaya said a special task force has been formed, consisting of non-structural advisers from the Customs Directorate, the Inspectorate General, and former tax officials. The team will identify major tobacco distributors in each region and trace the distribution networks of illegal cigarettes based on community reports.

“These are experienced people who know the system well. They’ll identify the illegal big players in every area,” Purbaya said.

He acknowledged that influential figures, including rogue Customs officers, often back the illicit trade. “It’s said that many of them have protectors, most likely from within Customs too. There may be others involved, but we will sort this out,” he asserted.

Earlier this month, Purbaya had also pledged to offer a legalization path for small-scale producers, aiming to create a fairer market and protect employment in Indonesia’s vast tobacco industry. During a visit to the Tobacco Product Agglomeration Center (APHT) in Kudus, Central Java, known as the country’s “clove cigarette city,” the minister said illegal producers could receive amnesty if they joined the formal sector.

Indonesia loses an estimated Rp 15 trillion ($940 million) annually in unpaid taxes from illegal cigarette sales, according to the Industry Ministry. Around 22 billion illegal cigarettes were sold nationwide in 2023, representing nearly 7 percent of total production.

Tobacco remains Indonesia’s single largest source of excise revenue, contributing roughly 90 percent of the Rp 300.2 trillion collected in 2024. The government raised cigarette excise rates under Finance Ministry Regulations No. 96 and 97 of 2024, which increased minimum retail prices across all categories to curb smuggling and under-the-counter sales.

Current duties range from Rp 1,231 per stick for premium machine-made kretek to Rp 223 per stick for lower-tier hand-rolled cigarettes.

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