How much revenue does the government earn from cigarette excise taxes?

In the 2017 State Budget (APBN), the government targeted tax revenue from cigarette excise duties of Rp 149.9 trillion, a 6 percent increase from the 2016 Revised State Budget (APBNP). This cigarette excise revenue is equivalent to 10 percent of the 2017 tax revenue target of Rp 1,498 trillion. The government raised cigarette excise duties to reduce consumption.

Discussions on the Draft Law (RUU) on tobacco are still ongoing between the government and the House of Representatives (DPR). The government plans to withdraw this Draft Law and replace it with a government regulation (PP), which legally holds a lower status than a law.

Some argue that the Draft Law only benefits large cigarette producers and is not in favor of small cigarette companies or tobacco farmers. The surge in tobacco imports has resulted in losses for tobacco farmers. Data also shows that the number of domestic cigarette producers currently stands at 754 companies, down from 4,669 companies in 2007. The increase in excise duties and high labor costs have forced small cigarette producers out of business due to their inability to compete with large cigarette companies.