September 22, 2025 | 01:37 pm
TEMPO.CO, Jakarta - The Chair of the National Commission for Tobacco Control, Hasbullah Thabrany, has strongly criticized Finance Minister Purbaya Yudhi Sadewa's recent statement that Indonesia's 57% cigarette excise tax is too high. Hasbullah believes this viewpoint could encourage government officials to maintain or even lower the excise tax, rather than increasing it.
Hasbullah argues that such a stance would undermine efforts to curb cigarette consumption, which is a major risk factor for deadly diseases and poses a threat to Indonesia's overall macroeconomic stability.
"Excise is necessary to prevent children from becoming addicted. More than 200,000 Indonesians die from cigarettes every year, so we need to suppress this with high excise," he said.
The National Commission for Tobacco Control notes that while the 57% excise tax is the maximum allowed under Indonesia's current Excise Law, it remains low compared to other countries. For instance, Singapore's cigarette excise tax is 67.5%, and Australia's is 72%. As a result, the average price of a pack of cigarettes is approximately Rp170,000 in Singapore and Rp400,000 in Australia. These prices are significantly higher than the average retail price of cigarettes in Indonesia, which is around Rp40,000 per pack.
"Therefore, cigarette excise taxes must be raised again, not lowered. Public policy, not trade policy," Hasbullah emphasized.
During a media briefing on Friday, September 19, 2025, Minister Purbaya questioned the high excise tax, calling the policy "a bit odd." He stated, "I asked, 'What about cigarette excise taxes? What's the average now?' 'Fifty-seven percent.' 'Wow, that's really high. You're like a Pharaoh!' Something like that, that's a lot."
Despite Purbaya's comments, the Ministry of Finance has not yet set the tobacco excise tax rates for 2026. Deputy Minister of Finance Anggito Abimanyu stated on Thursday, September 18, 2025, that the ministry is still reviewing the policy. "It's still being reviewed; it hasn't been decided yet. There's still time," he was quoted as saying.
The government and the House of Representatives have agreed to increase customs and excise revenue targets for 2026 to Rp336 trillion from the previous Rp334.3 trillion, but the specific details of the excise tariffs are still being evaluated based on this year's developments.
Editor’s Choice: Why Cigarette Tax Should Be Increased by 25 Percent per Year
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