The Directorate General of Customs and Excise has an important role in cracking down on
the circulation of illegal cigarettes. The implementation of the Illegal Cigarette Operation is
a follow-up to the direction of the Minister of Finance of the Republic of Indonesia, Sri
Mulyani Indrawati, who set a target of reducing the percentage of illegal cigarette
circulation from 7% (based on a 2018 UGM survey) to 3% in 2019. Based on the survey, the
circulation of illegal cigarettes in Banten Province in 2018 was quite high with a figure of
13.6% of all of Indonesia. The circulation of illegal cigarettes in Banten Province is
dominated by violations of plain cigarettes or cigarettes without excise stamps which are
widely traded in rural areas or remote and isolated areas in the southern and northern
coastal parts of Banten Province.This type of legal research uses a normative legal research
method, which is based on positive legal norms related to the research object. The
circulation of illegal cigarettes can reduce the amount of tax revenue from tobacco products
by the government. The obstacles in implementing control over the distribution of illegal
cigarettes in Indonesia, especially Banten province, are: First, the determination of the
excise tax rate without consideration and survey of the average income level of business
actors in Banten's community can make it difficult for micro-business actors selling
cigarettes in the Banten area. Second, budget limitations in the supervision and allocation
of Tobacco Excise Revenue Sharing Funds, thus creating a loophole for the Banten
Directorate General of Customs and Excise to monitor the circulation of illegal cigarettes
in Banten province. Third, the high excise rate causes cigarette distributors to sell cigarettes
illegally because they feel they are more profitable if they sell cigarettes without excise.
Efforts to overcome the obstacles to controlling illegal cigarettes at the Banten Customs and
Excise Regional Office are carried out in a preventive (prevention) and repressive
(enforcement) manner. The advice that can be given by the author is: it is necessary to carry
out sustainable cooperation (sustainable) between the Banten Regional Customs and Excise
Office (Kanwil Customs and Excise) and Law Enforcement Officials in taking action against
illegal cigarette distributors in the Banten area.