Indonesia's Parliament Approves No Tobacco Excise Hike in 2026 Amid Industry Concerns

Indonesia's government, led by Finance Minister Purbaya Yudhi Sadewa, has decided not to raise tobacco excise tariffs in 2026 after consultations with major cigarette industry players. This move aims to balance pressures on the tobacco sector, protect jobs, and sustain state revenue amid declining production and the growth of illicit cigarette circulation. The government plans to expand tobacco industrial zones to bring illegal producers into the formal tax system and promote fair competition, ensuring that both large and small companies can operate without disruption. Minister Sadewa rejected proposals from large firms to produce cheaper products targeting smaller companies, emphasizing support for small businesses' survival. Parliament and industry representatives have supported this decision, highlighting the need for a comprehensive review of tobacco excise regulations to curb illegal trade and safeguard livelihoods. The government’s focus remains on maintaining industry balance while combating illegal cigarette circulation domestically and from imports.