DJBC Estimates Illegal Cigarette Circulation Has Dropped to 3%

The Directorate General of Customs and Excise (DJBC) of the Ministry of Finance estimates that the circulation of illegal cigarettes will fall again to 3% throughout 2021.

Director-General of Customs and Excise Askolani said the trend in the circulation of illegal cigarettes had shown a decline in the past year. The circulation of illegal cigarettes had jumped in 2020 to reach 4.8%.

“In 2021, our estimate is around 3%, but this is still a number that must be validated by UGM, which conducts this survey every year,” he said in a meeting with Commission XI of the DPR, quoted on Saturday (16/4/2022).

Askolani said the government through DJBC had made various efforts to suppress the circulation of illegal cigarettes. One of them is through optimizing the supervision of illegal excisable goods.

He explained that the enforcement of illegal tobacco products is the largest, reaching 64.43% of the supervision carried out by DJBC in 2021. While the rest, supervision of goods such as beverages containing illegal ethyl alcohol, illegal textile imports, and smuggling of psychotropic substances.

Especially for illegal cigarettes, the circulation had reached 12.1% in 2016. That figure was slowly lowered to only 3.0% in 2019.

However, the Covid-19 pandemic caused the circulation of illegal cigarettes to increase again by 4.8% in 2020.

“From the supervision of excisable goods, from this tobacco product in 2019 it fell, [but] 2020 the trend was to increase by 4.8%,” he said.

On several occasions, Finance Minister Sri Mulyani said the government would try to reduce the circulation of illegal cigarettes to below 3%. He assessed that the increase in the circulation of illegal cigarettes in 2020 was mainly due to the increase in high excise rates.

According to him, a high excise tax increase on tobacco products can encourage people to cheat to make illegal cigarettes.

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