Minister of Finance (MoF) Regulation No. 26 of 2026 revokes MoF Regulation No. 143 of 2023 to align the administration of Cigarette Tax with developments in central-regional fiscal relations and the modernization of excise and tax administration systems. The regulation comprehensively governs the mechanisms for the collection, payment, remittance, withholding, and refund of overpayments, and distribution of Cigarette Tax revenue to regional governments.

This regulation was issued on 22 April 2026 and became effective on 12 May 2026. Its primary focus is to strengthen the digitalization of Cigarette Tax administration through integration with excise application systems, while also enhancing oversight of Cigarette Tax obligations administered under a self-assessment mechanism.

The key provisions of this regulation are as follows:

1. Cigarette Tax rate remains at 10% of Tobacco Excise
   The regulation maintains the provision that Cigarette Tax is imposed at 10% of the Tobacco Excise payable on tobacco products.  Accordingly, the amount of Cigarette Tax due will follow the excise value applicable to the relevant tobacco products.
2. Strengthening of the self-assessment mechanism and electronic reporting
   Cigarette Tax is collected under a self-assessment system, whereby Cigarette Taxpayers (tobacco manufacturers or importers) calculate their own Cigarette Tax liabilities and report them through a Cigarette Tax Return (Surat Pemberitahuan Pajak Rokok/SPPR). The SPPR must be submitted electronically to the Customs and Excise Office through the excise application system and filed together with the excise stamp ordering document (CK-1).In the event of system disruptions, manual submission of the SPPR through the Customs and Excise Office remains permissible.
3. Payment through the Directorate General of Customs and Excise (DGCE) billing system
   Cigarette Tax payments must be made directly to the State Treasury Account (Rekening Kas Umum Negara/RKUN) through a Collecting Agent using a billing code issued by the Directorate General of Customs and Excise via the billing portal. Upon payment, the Collecting Agent will issue a State Revenue Receipt (Bukti Penerimaan Negara/BPN) as proof of payment.This mechanism enhances transaction validity, improves the accuracy of state revenue recording, and supports the implementation of an electronic state revenue system.
4. Integrated supervision with excise stamp services
   The DGCE will review the SPPR and Cigarette Tax payment before processing the CK-1 application. If the review indicates that the Cigarette Tax has not been fully paid, applications for excise stamp provision for subsequent periods will not be processed until the outstanding obligation has been settled.This provision creates a closer linkage between Cigarette Tax compliance and access to excise services.
5. Collection mechanism for Cigarette Tax underpayments
   The regulation establishes clearer procedures where a Cigarette Tax underpayment is identified due to:
   – Excise underpayment;
   – Errors in the SPPR calculation;
   – Failure to settle Cigarette Tax liabilities; or
   – Adjustments to excise rates and classifications in accordance with prevailing regulations.
   Under such circumstances, the Head of the Customs and Excise Office will issue a Notice of Cigarette Tax Underpayment, which also serves as the basis for regional tax collection. Cigarette Taxpayers are required to settle the underpayment within 30 calendar days from the date the notice is delivered.
6. Strengthening the management and distribution of Cigarette Tax revenue to regional governments
   MoF Regulation No. 26/2026 provides detailed provisions on the distribution of Cigarette Tax revenue from the central government to regional governments, including the allocation proportions for each province, revenue-sharing mechanisms for regencies and municipalities, and the reconciliation process for revenue data. 

   Transfers to Regional Treasury Accounts (Rekening Kas Umum Daerah/RKUD) are made quarterly based on actual revenue realization and predetermined allocation proportions. 

7. Mandatory support for the National Health Insurance program
   One of the key provisions of this regulation is the requirement that a portion of regional Cigarette Tax revenue be allocated to support the National Health Insurance program administered by BPJS Health.The Cigarette Tax revenue is earmarked for specific uses; 37.5% of each region’s total entitlement must be allocated as a contribution to support the National Health Insurance program. If a regional government fails to fulfill this obligation, the Minister of Finance may reduce the Cigarette Tax allocation by the amount of the unpaid contribution.
8. Refunds and compensation for Cigarette Tax overpayments
   The regulation also provides a clearer mechanism for Cigarette Taxpayers to claim refunds of Cigarette Tax overpayments arising from:
   – Calculation errors;
   – Payments made on transactions that are not subject to Cigarette Tax;
   – Payments that were not legally due; or
   – Refunds of Tobacco Excise.Refunds may be processed either through a restitution mechanism or as a credit against future Cigarette Tax liabilities, depending on the reason for the overpayment.

For tobacco manufacturers and importers, MoF Regulation No. 26 of 2026 reinforces administrative compliance obligations through the full digitalization of Cigarette Tax reporting and payment processes. Companies must ensure consistency between excise calculations, SPPR filings, Cigarette Tax payments, and excise stamp orders, as discrepancies or outstanding Cigarette Tax liabilities may directly affect the continuity of excise services and the provision of excise stamps.

Overall, this regulation reflects the government’s efforts to establish a more integrated, transparent, and accountable Cigarette Tax administration system, while strengthening the role of Cigarette Tax as a source of funding for healthcare services and regional government revenues.