Excise tax
Learn what excise tax (cukai) is in Indonesia, which goods it covers, 2026 rates and how it affects your prices.
March 2024 | Published by Xero
Published Wednesday 30 September 2026
Table of contents
Key takeaways
- Excise tax (cukai) is a charge on specific goods the government wants to monitor or limit. In Indonesia, it covers ethyl alcohol, alcoholic drinks and tobacco products.
- Tobacco excise rates and minimum retail prices are unchanged for 2026. The Finance Minister said in July 2026 that no increase is planned for 2027.
- Manufacturers and importers pay excise, but the cost flows through to every business that buys the goods. Resellers feel it in their purchase prices and margins.
- Anyone who makes, stores, imports, distributes or retails excisable goods may need an excise licence. Operating without one can lead to fines of up to Rp200,000,000.
What is excise tax?
Excise tax, known in Indonesia as cukai, is a tax on particular goods whose use the government wants to control. It’s charged per unit and built into the price you pay.
The legal basis is Law 11/1995 on Excise, as amended by Law 39/2007 and Law 7/2021 on Tax Harmonisation. The Ministry of Finance’s learning centre notes that the ministry runs excise through the Directorate General of Customs and Excise (Direktorat Jenderal Bea dan Cukai, DJBC).
Goods become excisable when they have one or more of four traits. The law describes them as goods that:
- need their consumption controlled
- need their distribution monitored
- can harm people or the environment when used
- warrant a state levy for the sake of fairness and balance
Picture buying a pack of cigarettes at a warung. The printed stamp on the pack shows the manufacturer has already paid cukai, and that cost is part of the price you hand over.
Goods subject to excise tax in Indonesia
Indonesia currently levies excise on three groups of goods. The list is short, so it’s easy to check whether your products are affected.
- Ethyl alcohol, also called ethanol
- Drinks containing ethyl alcohol (minuman mengandung etil alkohol, MMEA), such as beer, wine and spirits
- Tobacco products, including cigarettes, cigars, sliced tobacco, e-cigarettes and other processed tobacco products (hasil pengolahan tembakau lainnya, HPTL)
Two proposed additions aren’t in force. The planned excise on packaged sugary drinks (minuman berpemanis dalam kemasan, MBDK) was dropped for 2026. Plastic excise wasn’t proposed in the 2025 budget either.
Types of excise tax
Excise can be set as a fixed amount per unit or as a percentage of value. Knowing which method applies tells you how your costs will move when prices change.
Specific excise tax
A specific excise is a fixed Rupiah amount per unit, such as per stick, per gram or per litre. Indonesia uses this method for tobacco and alcohol, so the tax stays the same whether a product sells cheaply or at a premium.
For tobacco, each rate is tied to a minimum retail selling price (harga jual eceran, HJE). The price floor and the tax move together.
Ad valorem excise tax
An ad valorem excise is a percentage of a product’s value. The tax grows as the price rises, so a premium product pays more than a budget one.
The Indonesian rates covered below are specific amounts. You’ll still see the ad valorem idea in other taxes, such as VAT, which is also a percentage of price.
Excise tax rates in Indonesia for 2026
Tobacco excise rates are set by PMK 96/2024 and PMK 97/2024 (Peraturan Menteri Keuangan, Minister of Finance Regulation). According to DDTC News, these kept 2025 rates steady while lifting minimum retail prices.
For 2026, the government has held both the tobacco rates and the HJE at their existing levels. In July 2026, the Finance Minister said there would be no rise in 2027, according to CNBC Indonesia.
Alcohol rates depend on the drink’s class (golongan) and alcohol content. Under PMK 160/2023, which took effect in 2024, the per-litre rates are as follows.
- Rp16,500 per litre for Golongan A drinks with up to 5% alcohol, whether local or imported
- Rp42,500 per litre for local Golongan B drinks with more than 5% and up to 20% alcohol, or Rp53,000 if imported
- Rp101,000 per litre for local Golongan C drinks with more than 20% and up to 55% alcohol, or Rp152,000 if imported
- Rp20,000 per litre for ethyl alcohol
Rates are set by PMK and can change with a new regulation. Check the latest PMK before you raise prices or lock in a supplier contract.
Who pays excise tax and when?
The manufacturer or importer pays excise, not the shop selling to consumers. Under Law 39/2007, manufacturers pay before goods leave the factory or storage site, and importers pay when goods enter Indonesia.
Payment is usually shown with excise stamps (pita cukai) attached to each pack or bottle. The stamp proves the tax is settled, so buyers further down the chain can see the goods are legal.
The cost then passes along to distributors and retailers in their purchase prices. If you run a shop, it shows up as higher supplier bills in your accounts payable.
How to calculate excise tax
Because Indonesia uses specific rates, the maths is simple multiplication. Follow these steps to work out the excise on a batch of goods.
- Identify the product’s category and class, such as a Golongan B drink or a type of cigarette.
- Find the matching rate in the current PMK for that category.
- Multiply the rate by the quantity, in sticks, grams or litres.
- Add the result to your cost records and factor it into your pricing.
Here’s an illustrative example. A local producer releasing 1,000 litres of a Golongan B drink pays 1,000 × Rp42,500 = Rp42,500,000 in excise. That amount becomes part of its cost of sales.
Excise licences and penalties
Businesses that handle excisable goods usually need an excise business registration number (Nomor Pokok Pengusaha Barang Kena Cukai, NPPBKC). The NPPBKC requirement covers manufacturers, storage operators, importers, distributors and retail outlets of excisable goods.
You apply for an NPPBKC at the customs and excise office that supervises your premises. Getting it before you start trading lets you stock excisable goods legally.
The penalties are steep. Under Law 39/2007, Article 14(7), operating without an NPPBKC can bring a fine of Rp20,000,000–Rp200,000,000. Attaching the wrong excise stamps so that too little excise is paid can cost 2–10 times the excise that should have been paid.
Excise tax vs VAT
Excise and value added tax (Pajak Pertambahan Nilai, PPN) can both apply to the same product. They work differently, though, and the gaps matter for your pricing.
- Excise applies only to excisable goods, while PPN applies to most goods and services
- Excise is a fixed amount per unit, while PPN is a percentage of the price
- Excise is paid once by the manufacturer or importer, while PPN is usually collected at each sale
- Excise sits inside the purchase price, while PPN usually appears as a separate line on invoices
The PPN rate is 12%, but for non-luxury goods it’s applied to 11/12 of the price. That gives an effective rate of 11%.
Tobacco follows its own VAT method. VAT on tobacco products uses a deemed value and is collected once, by the manufacturer or importer when ordering excise stamps. Distributors and retailers don’t collect it again.
Cigarettes also carry a regional cigarette tax (pajak rokok). Under PMK 26/2026, it’s set at 10% of cigarette excise.
Excise tax vs customs duty
Customs duty (bea masuk) and excise are often confused because DJBC handles both. The key difference is what triggers each tax.
Customs duty is charged on imported goods only. Excise applies to excisable goods whether they’re made locally or brought in from overseas.
That means an imported bottle of wine can attract both. The importer pays customs duty because it crosses the border, and excise because it contains ethyl alcohol.
Why excise tax matters to small business
Excise shapes your costs even when you never pay it directly. Say you run a café or minimarket selling beer or cigarettes: the excise sits inside every unit you buy.
That fixed cost per unit affects your gross profit margin, especially on lower-priced lines. A rate change can squeeze margins quickly unless you adjust your selling prices.
Excise also ties up cash, because you pay it upfront when you buy stock. Planning purchases around it helps you keep cash flow steady. Check early whether your outlet needs an NPPBKC, as retail sellers of some excisable goods do.
Manage excise costs with Xero
Excise is a fixed cost built into what you buy. Tracking it closely keeps your prices and margins on target. Clear records also make it easier to plan when rates change.
With Xero accounting software, you can record supplier bills and see how excise affects profit in real-time reports. Sign up today and get one month free.
FAQs on excise tax
These answers cover common questions Indonesian business owners ask about excise.
Is fuel subject to excise tax in Indonesia?
No, fuel isn’t an excisable good in Indonesia. Instead, Ortax explains that provinces charge a motor vehicle fuel tax (Pajak Bahan Bakar Kendaraan Bermotor, PBBKB) of up to 10%.
Is there an excise tax on sugary drinks in Indonesia?
Not in 2026, so you can price packaged sweet drinks without adding excise. If the plan returns, it’ll come through a new regulation, so watch DJBC announcements before you set future prices.
Do retailers charge VAT on cigarettes?
Retailers generally don’t add VAT when they sell cigarettes, because it was collected once upstream. Other products in your shop still follow the normal PPN rules, so keep the two groups separate in your records.
Is excise tax part of the cost of goods?
Yes. If your business pays excise or buys goods with it built in, that excise is part of the product’s cost of goods sold.
Will tobacco excise rates rise in 2027?
No rise has been announced for 2027. Any change would arrive in a new PMK, so check for it before you plan next year’s pricing and stock orders.
Related terms
Learn more about excise tax
Handy resources
Advisor directory
You can search for experts in our advisor directory
Cash flow forecast template
Check you’ll have enough money for that tax bill
Financial planning tools
Automate your record keeping, forecasting, and tax prep
Disclaimer
This glossary is for small business owners. The definitions are written with their requirements in mind. More detailed definitions can be found in accounting textbooks or from an accounting professional. Xero does not provide accounting, tax, business or legal advice.