Inp.polri.go.id - Jakarta. Tobacco industry players in East Java are calling on Minister of Finance Purbaya Yudhi Sadewa to immediately establish a specialized excise tax category for local cigarette producers. 

During a press statement on Friday (27/2/2026), entrepreneurs from Pamekasan, Madura, argued that current high excise rates stifle small businesses and drive the circulation of illegal, untaxed cigarettes. They proposed a more realistic tariff structure to encourage legal compliance among regional manufacturers.

"If the government implements a more adaptive tariff, small and medium enterprises will be incentivized to enter the legal system, effectively curbing illegal trade," said Fathor Rozi, the owner of PR Cahaya Pro cigarette factory, as cited by antaranews.com.

The industry proposes a specific rate for Machine-Made Clove Cigarettes (SKM) ranging from Rp 150 to Rp 250 per stick, slightly above the current Hand-Rolled (SKT) rate of Rp122. This push gained momentum after House Commission XI indicated its plan to approve a new excise "layer" to accommodate regional economic realities. Proponents believe this adjustment will broaden the national tax base while sustaining local employment in the tobacco heartlands.

(mg/inp/pr/rs)