By Timothy S. Donahue

Top Takeaways:

• Six Companies Searched: Indonesia’s anti-corruption agency raided six companies affiliated with tobacco giant Djarum.
• Excise Investigation: Authorities are examining alleged cigarette tax manipulation and improper payments to customs officials.
• No Suspects Named: Investigators seized documents and electronic evidence, while Djarum pledged cooperation.

Indonesia’s tobacco tax investigators are knocking on some very large doors.

The country’s Corruption Eradication Commission (KPK) searched six companies affiliated with tobacco giant PT Djarum in Kudus, Central Java, as part of an expanding investigation into alleged corruption involving cigarette excise taxes from 2016 to 2025.

The searches took place on October 29, following raids the day before at Djarum’s offices and the local Customs and Excise Supervision and Service Office.

KPK spokesperson Budi Prasetyo confirmed that investigators searched six Djarum-affiliated companies and seized documents and electronic evidence for further examination, according to Tempo.

No suspects have been identified in the tobacco excise investigation.

Djarum Corporate Communications Manager Budi Darmawan confirmed the presence of investigators and stated that the company would cooperate with authorities.

“We respect and abide by the law. We are cooperative,” Darmawan told local media.

The investigation is examining suspected manipulation of cigarette excise obligations, including allegations that manufacturers improperly classified cigarettes under lower-tax categories to reduce payments.

One suspected scheme involves placing excise stamps intended for hand-rolled cigarettes on machine-made products, which are taxed at different rates. Investigators are examining whether such practices allowed manufacturers to pay less excise tax than required.

The inquiry stemmed from a broader corruption investigation involving Indonesia’s Directorate General of Customs and Excise.

In February, KPK investigators uncovered approximately Rp5.19 billion in cash during a search of a safe house in Ciputat, South Tangerang, as part of an investigation initially focused on alleged bribery and improper payments related to the import of counterfeit goods.

Documents seized during searches of Customs and Excise headquarters led investigators to examine possible irregularities in tobacco excise administration.

Beginning in March, the agency summoned several tobacco industry executives to provide information on excise procedures and suspected payments to customs officials.

The investigation has since expanded to examine tobacco tax administration over nearly a decade.

Indonesia’s Directorate General of Customs and Excise said it was gathering information on the Kudus searches and would cooperate with investigators. “In principle, Customs and Excise is committed to being cooperative and supporting the ongoing legal process,” agency spokesperson Netty Hartawati said.

The agency said public services at the Kudus customs office would continue to operate normally.

The investigation comes as authorities examine whether Indonesia’s cigarette excise classification system was exploited to reduce tax liabilities. For tobacco manufacturers, the outcome could affect excise compliance and oversight of production classifications.