Anticipating Illegal Cigarettes, Finance Minister to Develop Tobacco Industrial Zones
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JAKARTA, Investortrust.id — Finance Minister Purbaya Yudhi Sadewa has announced plans to develop more intensive tobacco industrial zones in regions suspected of harboring illegal cigarette production. The initiative, unveiled on Thursday, Oct. 2, 2025, during his visit to the State Finance Building in Surabaya, East Java, aims to protect state revenue and create fair competition within the tobacco industry.
"We are planning to establish more intensive tobacco industrial zones in areas suspected of being centers of illegal production," Purbaya said.
He explained that maintaining a balanced tobacco excise duty is crucial to ensure stable state revenues without harming legitimate producers. Illegal cigarette manufacturers, he added, would continue to face strict enforcement.
"Why should they be eradicated? Because some pay excise duty while others do not. If those who pay are forced to compete with those who don’t, they will suffer losses," he said.
Purbaya also emphasized tighter law enforcement, particularly at ports, to block the smuggling of illegal cigarettes into the country. "It should not be long before we catch more offenders," he said.
According to official data, the East Java Regional Office of Customs and Excise issued 1,519 enforcement letters between January and September 2025. These operations resulted in the seizure of 253.4 million illegal cigarettes, with estimated state losses reaching Rp 210 billion, equal to $12.6 million.
During the same period, authorities issued 59 official investigation orders in coordination with law enforcement agencies. The East Java office also settled 114 ultimum remedium decisions, imposing financial claims totaling Rp 52.6 billion, equal to $3.2 million, for illegal excise-related cases.