2.5% of Cigarette Tax Revenue to Fund Customs and Excise Enforcement: Intelligence, Patrols, and Case Handling Set to Benefit

The Minister of Finance (“Minister”) has issued Regulation No. 70 of 2026 on the Use of Cigarette Tax Revenue for Law Enforcement in the Customs and Excise Sector (“Regulation 70/2026”). Regulation 70/2026 stipulates guidelines for the central government in using such revenue for customs and excise law enforcement, with the aim of increasing customs and excise revenue and protecting domestic industry.[1]

In essence, Regulation 70/2026 provides that Cigarette Tax Revenue (Penerimaan Pajak Rokok) may be used for customs and excise law enforcement carried out by the Directorate General of Customs and Excise (Direktorat Jenderal Bea dan Cukai – “DJBC”), in the amount stipulated under  Law No. 17 of 2025 on the State Budget for 2026 (“Law 17/2025”).[2] It should be noted that Cigarette Tax Revenue under Regulation 70/2026 specifically refers to the levy on cigarette excise collected by the central government.[3] For 2026, Art. 51 (1) of Law 17/2025 expressly provides that Cigarette Tax Revenue may be used by the central government for customs and excise law enforcement in the amount of 2.5%.[4] Such portion is recorded as Non-Tax State Revenue (Penerimaan Negara Bukan Pajak – “PNBP”) from cigarette tax (“Cigarette Tax PNBP”) at the Ministry of Finance and is deposited together with the regional governments’ share of cigarette tax.[5]