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Tag: Indonesia

  • Indonesia Looking to Crack Down on Illegal Cigarette Trade

    Indonesia Looking to Crack Down on Illegal Cigarette Trade

    Indonesia’s Finance Minister Purbaya Yudhi Sadewa pledged a crackdown on the country’s illegal cigarette trade, warning that anyone involved—including officials inside Customs or the Finance Ministry—will face consequences. Speaking at a budget briefing in Jakarta today (September 22), he vowed to conduct random checks on distribution channels and ordered e-commerce platforms to block illicit product listings, adding: “Spread the word: wherever illegal cigarettes are being sold, I will come.”

    The announcement comes as Indonesia enforces new 2025 tobacco excise rules. While excise tax rates remain unchanged, the government raised minimum retail prices across categories to deter smuggling and under-the-counter sales. Excise duties range from Rp 1,231 ($0.08) per stick for premium machine-made kretek to Rp 223 ($0.013) per stick for lower-tier hand-rolled kretek, with e-cigarettes taxed up to Rp 6,776 ($4.07) per milliliter. Despite these measures, around 22 billion sticks of illicit cigarettes were sold in 2023, costing the state Rp 15 trillion ($940 million) in lost revenue.

  • Indonesia Reviews Cigarette Excise Amid Forgery Allegations

    Indonesia Reviews Cigarette Excise Amid Forgery Allegations

    Indonesia’s government is conducting an in-depth review of the cigarette excise system following allegations of forgery and manipulation, Finance Minister Purbaya Yudhi Sadewa said after a meeting with President Prabowo Subianto. Sadewa noted that he has yet to reach any conclusions, stressing that policy decisions, including whether to proceed with the planned 2026 excise hike, will depend on the results of ongoing studies and field investigations.

    “I will review it again,” Sadewa was quoted in an article from the Indonesian News Agency when asked about the proposal to cancel the planned excise hike. “I have not conducted an in-depth analysis yet — what exactly is going on with cigarette excise? They say there is manipulation, but where exactly is this manipulation happening?”

    The minister highlighted the potential revenue gains from eliminating counterfeit excise stamps, saying such reforms could strengthen state finances without placing additional pressure on consumers. “If I can resolve this and eliminate counterfeit excise, how much revenue would that generate? From there, I can plan the next steps,” he told reporters.

    Lawmakers are also weighing in. At a September 10 parliamentary session, Commission XI member Harris Turino raised concerns about the impact of steep tax increases on major producers like Gudang Garam and their workers, particularly in the machine-made clove cigarette (SKM) sector. He urged the government to prioritize enforcement against illicit trade as a more balanced way to boost revenue.

  • Employers, Union Push Back Against Indonesian Tobacco Tax Hike

    Employers, Union Push Back Against Indonesian Tobacco Tax Hike

    The Indonesian Employers Association (Apindo) and industry representatives warned the government against raising tobacco excise duties next year, citing risks to competitiveness, jobs, and supply chains in the country’s labor-intensive cigarette sector. Apindo chairwoman Shinta Kamdani said further hikes would add pressure on producers already hit by higher excise this year. “If a higher excise is implemented without considering the real conditions of the [tobacco] industry, risks of weakening competitiveness and eroding job opportunities will only grow,” she said.

    Tobacco manufacturers and unions echoed the concerns, noting that higher duties would further squeeze margins, reduce farmer tobacco purchases, and accelerate the shift toward untaxed illegal cigarettes, which already make up nearly half of consumption. With the sector employing millions and contributing heavily to state revenue, they urged the government to balance fiscal goals with economic stability.

    The warning comes as the government targets a 10% increase in state revenue in 2025 to Rp 2.86 quadrillion ($174.9 billion). Finance Minister Sri Mulyani Indrawati has set a 13.5% rise in tax collection as the benchmark, though she admitted the goal was “ambitious” amid weak revenue performance this year.

  • Indonesia Moves to Classify Tobacco as a Strategic Commodity

    Indonesia Moves to Classify Tobacco as a Strategic Commodity

    Indonesia’s House of Representatives (DPR) is drafting a bill to include tobacco among eight strategic plantation commodities, aiming to safeguard the sector and protect farmer livelihoods. The move comes amid falling tobacco absorption and growing farmer concerns. Lawmaker Sofyan Dedy Ardyanto, who represents Temanggung, Central Java, said the bill has been shaped with input from the Indonesian Tobacco Farmers Association (APTI) and local governments.

    Despite declining demand, Indonesia remains one of the world’s largest cigarette markets, with the industry supporting more than 5 million workers and contributing significantly to state revenue through excise taxes.

    Ardyanto cautioned that the country’s ratification of the FCTC has weakened the sector. “The industry is still viable, but our regulations treat it like a dying sector,” he said.

  • Gudang Garam Denies Layoff Rumors Amid Financial Strain

    Gudang Garam Denies Layoff Rumors Amid Financial Strain

    Indonesian cigarette producer PT Gudang Garam has strongly denied claims of mass layoffs at its Kediri and Tuban factories. Over the weekend, a viral video showing hundreds of PT Gudang Garam Tbk employees shaking hands in what appeared to be an emotional farewell sparked layoff rumors. Adib Musyafa, head of human resources at the Tuban plant, called those rumors false and the video misleading, confirming that all 850 employees remain active, and no layoffs have occurred. He clarified that routine performance evaluations do not automatically lead to dismissals, urging the public to rely on official company statements.

    The Indonesian Trade Union Confederation (KSPI) picked up on the video and said it was verifying the reports and warned of potential ripple effects across the supply chain, which added to the validity of the rumor.

    The company reportedly saw an 82% drop in net profit in 2024 and its stock drop 33.7% this year, pointing to the financial pressures of higher excise taxes, falling sales, and competition from illegal cigarettes, but insists that mass workforce reductions have not taken place.

  • Singapore Vape Ban is Tourism Opportunity for Indonesia

    Singapore Vape Ban is Tourism Opportunity for Indonesia

    Officials in Batam, Indonesia say Singapore’s strict ban on vaping could boost cross-border tourism, as Singaporeans seek looser regulations just a 45-minute ferry ride away.

    Batam Tourism Agency head Ardiwinata told The Jakarta Post that restrictions in Singapore historically drive residents to neighboring Batam, citing past examples where tight rules created new tourism opportunities. “As long as it does not violate our regulations, they can choose Batam,” he said.

  • Indonesia Cracking Down on Ketamine-Laced Vapes

    Indonesia Cracking Down on Ketamine-Laced Vapes

    Indonesia’s Food and Drug Monitoring Agency (BPOM) has vowed strict enforcement against electronic cigarette products found to contain ketamine, a powerful anesthetic increasingly misused as a recreational drug. BPOM Chief Taruna Ikrar said the agency’s mandate focuses on harmful substances, not just the form of the product.

    “The Agency also has the authority to take action, not because of the cigarette or vape, but because it contains harmful substances,” he told reporters in Jakarta.

    The move follows seizures by the National Narcotics Agency (BNN), which recently intercepted counterfeit ketamine, synthetic marijuana, and vape pods allegedly laced with narcotics. Authorities warned that psychoactive substances disguised in vape products are spreading rapidly in Indonesia.

    BPOM confirmed that if ketamine is detected, it can immediately launch legal proceedings, while BNN continues testing vape brands circulating in the market.

  • Indonesian Illegal Cigarettes Fueled by Unregulated Rolling Machines

    Indonesian Illegal Cigarettes Fueled by Unregulated Rolling Machines

    The Directorate General of Customs and Excise in Jakarta, Indonesia, raised alarms over the growing presence of illegal cigarettes in the market, citing the unrestricted access to tobacco rolling machines as a key driver behind their mass production. Director of Communication and Compliance Guidance Nirwala Dwi Heryanto said that machines like the MK-8, which is capable of producing up to 2,800 sticks per minute, can be purchased for Rp5 billion ($305,000), and are widely available without regulatory oversight.

    Authorities are urging policy intervention to control machine distribution, tighten import regulations, and close loopholes allowing unlicensed manufacturing. Mouhamad Bigwanto, Chair of the Indonesian Health Policy Room (Rukki), warned that as long as machine access remains unregulated, the illegal cigarette industry will flourish. “Because the rolling machines can still be imported and purchased without a license, I think that is concerning,” he said.

  • Sampoerna Shows Progress in Smoke-Free Product Innovation

    Sampoerna Shows Progress in Smoke-Free Product Innovation

    PT HM Sampoerna Tbk highlighted major strides in advancing smoke-free alternatives in Indonesia during Technovation 2025, a one-day event held at the Park Hyatt Jakarta. The showcase underscored the growing trust in science- and technology-based nicotine products such as IQOS, VEEV, and ZYN, aimed at adult smokers seeking better alternatives.
    Sampoerna, along with parent company Philip Morris International, reaffirmed its commitment to responsible innovation rooted in science and to addressing public health challenges through cross-sector collaboration.

    Sampoerna President Director Ivan Cahyadi said the company’s goal is to provide adult smokers who would otherwise continue smoking with access to science-backed, smoke-free options. Since launching in 2019, Sampoerna’s smoke-free journey has included the opening of a dedicated production facility in Karawang and first regional exports in 2023.

  • Indonesia: Two Arrested for Making Narcotic-Laced Vapes in Apartment

    Indonesia: Two Arrested for Making Narcotic-Laced Vapes in Apartment

    Two people were arrested in North Sumatra, Indonesia, for allegedly operating an illegal drug lab that produced vape liquids infused with narcotics. Acting on a public tip, police raided an apartment and uncovered a makeshift factory that was producing up to 300 narcotic-laced vape cartridges per day, each selling for Rp 5 million ($305).

    North Sumatra Police Narcotics Division Chief Sr. Comr. Jean Calvijn Simanjuntak said police seized 2,965 cartridges, along with raw materials, solvents, flavoring agents, and sweeteners used in production.

    Both suspects were reportedly repeat drug offenders and are believed to have been running the illegal lab for at least six months.