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Sri Mulyani: 2020 Cigarette Excise Increases Highly, Illegal Cigarette Circulation Increases

Finance Minister Sri Mulyani Indrawati said, in 2020 there will be an increase in the circulation of illegal cigarettes. According to her, the ...

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Illustration - Finance Minister Sri Mulyani Indrawati said, in 2020 there will be an increase in the circulation of illegal cigarettes

According to her, the increase in the circulation of illegal cigarettes was triggered by the excise rate that went up too high that year. 

Based on the data she has, in 2020 the level of illegal cigarette circulation is close to 4.9 percent. 

Meanwhile, cigarette excise rates in the same year rose 23 percent. 

In fact, the Ministry of Finance wants, the rate of illegal cigarette circulation in Indonesia cannot be more than 3 percent. 

"Customs considers that's the instruction and a rather absurd target, but I have persisted to keep it at 3 percent. And it can be seen that in 2020, when the excise tax increases are quite high, it looks like the rate of illegal cigarette circulation has risen again to approaching 4.9 percent," said Sri Mulyani during a work meeting with Commission XI of the Indonesian Parliament, Wednesday (27/1/2021). 

She also emphasized that the increase in the circulation of illegal cigarettes due to high excise rates should be accompanied by tighter law enforcement. 

"This trade off is what we will see as well as other dimensions," Sri Mulyani explained. 

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Overall, the number of prosecution against the circulation of illegal cigarettes reached 448 million sticks with a value of Rp. 370 billion. 

According to Sri Mulyani, with the increasingly tighter supervision and enforcement of tobacco excise, the mode of violation with fake excise stamps continued to decline. 

For that, the government will also try to maintain the performance of prosecution. 

The Ministry of Finance will continue to be aware of the circulation of illegal cigarettes because cigarette prices will continue to rise, thereby providing incentives for counterfeiting excise and illegal cigarettes

"The mode of violation that is attached to fake excise stamps has begun to decline, and violations of tobacco products that are attached to fake excise stamps are 0.36 percent of the total cigarette circulation in Indonesia," said Sri Mulyani. (*) 

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Penulis: Lia Sisvita Dinatri
Editor: Lia Sisvita Dinatri
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