Indonesia's New Excise Regulation Raises Questions About 'Forgiveness' Clause

Finance Minister Expresses Surprise

Indonesia's Finance Minister Purbaya Yudhi Sadewa has expressed surprise at a new regulation that allows excise violators to settle their cases without formal investigation. The regulation, PMK No. 96/2025, was introduced to enhance legal certainty and accelerate state revenue recovery in the excise sector.

Key Provisions of the Regulation

The new policy allows businesses to resolve excise violations by paying administrative fines without going through a formal investigation process, provided that the excise duty amount can be accurately calculated and there are no customs violations involved. Director General of Customs and Excise Djaka Budhi Utama explained that this regulation aims to strengthen legal certainty while expediting the recovery of state revenue.

Maintaining Ultimum Remedium Principle

The regulation continues to uphold the principle of ultimum remedium, meaning that legal action remains the last resort in resolving excise cases. Djaka emphasized that while the policy provides a more efficient way to settle cases, it still maintains strict law enforcement while offering a balanced approach to fiscal correction.

Implications for Businesses and Revenue Collection

This new regulation is expected to have significant implications for businesses operating in Indonesia's excise-sensitive sectors, particularly those involved in tobacco and alcohol production. By allowing companies to settle violations through administrative fines, the government aims to enhance compliance while streamlining the enforcement process. The policy represents a shift towards more effective revenue collection methods while maintaining regulatory oversight.