Finance Minister Freezes 2026 Tobacco Excise and E-commerce Tax While Chasing Massive Tax Arrears

Several key issues in Indonesia’s fiscal policy and law enforcement efforts are in the spotlight today. The news highlights the government’s decision to keep tobacco excise tariffs unchanged and postpone e-commerce seller taxation, while intensifying Customs oversight and pursuing massive outstanding tax arrears. These policies reflect the government’s cautious approach in balancing support for the real sector with the need to secure state revenue.

The Ministry of Finance (MoF) is pursuing a dual-track fiscal strategy: strict law enforcement paired with stability-oriented policies. On the enforcement side, the MoF has only collected IDR 5 trillion out of a total of IDR 60 trillion in arrears from major tax delinquents—underscoring the significant challenge of recovering large unpaid tax obligations. In line with the need to boost the 2026 state budget target, Customs is also tightening oversight by planning inspections of green lanes to curb smuggling.

This crackdown has become more urgent after Customs uncovered a new modus operandi in the illegal cigarette trade, where sellers exploit online marketplaces—posing a serious threat to state revenue. In response to the black-market challenge and to safeguard labor-intensive industries, Finance Minister Purbaya decided not to raise tobacco excise tariffs for 2026. The decision aims to stabilize the tobacco industry and prevent a surge in illegal cigarette circulation.

At the same time, the government is showing caution in policies affecting household purchasing power and MSMEs. The plan to impose taxes on e-commerce sellers (such as Shopee and others) has been postponed until consumer demand improves—reflecting the government’s effort to shield domestic consumption from potential new fiscal burdens.

The recent policy developments illustrate a fiscal direction that is cautious yet firm. The decision to freeze tobacco excise hikes and delay the e-commerce tax demonstrates the government’s commitment to supporting MSMEs and maintaining stability in the real sector. However, the government still faces significant risks in the form of revenue losses from illegal cigarette trade and massive outstanding tax arrears. Customs’ tighter oversight is therefore a strategic move to safeguard state revenue.

The government’s current fiscal stance prioritizes business sector stability through targeted tax incentives while simultaneously stepping up law enforcement and oversight to secure revenue—especially from illegal cigarettes and delinquent taxpayers. Success in balancing MSME support with effective tax collection will be crucial to achieving state budget targets amid ongoing global economic risks.