Cigarette Tax (Pajak Rokok)

Cigarette Tax (Pajak Rokok) is a regional levy in Indonesia imposed on cigarette excise at a single rate of 10 percent of the excise amount. Receipts belong to provincial governments and are further shared with districts and cities at a 70:30 ratio (districts/cities : province). The Directorate General of Customs and Excise collects it alongside cigarette excise from manufacturers and importers, then channels it to provincial regional general treasury accounts proportionally by population. The primary legal basis is Article 36 of Law Number 1 of 2022 on Financial Relations between the Central and Regional Governments (UU HKPD), with technical procedures in PMK Number 26 of 2026, effective 12 May 2026. PMK 26/2026 requires regional governments to earmark at least 50 percent of receipts, with 37.5 percent of the total mandated as contribution to the National Health Insurance Program (JKN).

This article is for education, not tax advice.

Example

Cigarette factory PT X orders excise bands worth IDR 1 billion in June 2026. In addition to the IDR 1 billion excise settlement, PT X remits cigarette tax of IDR 100 million (10 percent of excise) to Customs and Excise. That IDR 100 million is then forwarded to provincial treasuries by population formula. If Province A receives IDR 500 million as its share in a year, at least IDR 187.5 million (37.5 percent) must be allocated as JKN contribution.