Indonesia’s New Cigarette Excise Duty to Combat Illegal Tobacco Trade

JAKARTA,Jan. 14 -​ The Indonesian government is considering ‌adding a new tier to its cigarette excise tax structure in ​an‍ effort to combat the proliferation of ⁤illegal tobacco products, according to Finance Minister Purbaya Yudhi Sadewa.

The proposed change aims ‍to incentivize ‌illicit cigarette‌ manufacturers to enter the formal market and comply with tax regulations. Minister Sadewa stated that the feasibility of adding this new layer is currently under review.

“We are⁤ working to ensure this ‍is a viable option,” he told reporters in Jakarta.

The government has also warned that businesses continuing to avoid tax obligations after the implementation of the new regulation will face stringent⁤ penalties. Indonesia has been streamlining its cigarette excise system in recent‌ years, reducing the number ⁢of tax tiers from 19 in⁢ 2009 to eight in 2022.