Indonesia's cigarette excise tax system currently comprises eight tiers differentiated by cigarette type, production method, and manufacturer scale. Wide inter-tier price gaps enable smokers to downtrade to cheaper alternatives when excise taxes increase, which can undermine both fiscal and public health objectives. This study aims to provide evidence on the potential impacts of alternative excise tax reform scenarios on cigarette prices, consumption, government revenue, and public health outcomes in Indonesia.

Using the Tobacconomics simulation model developed by the Economics for Health team at Johns Hopkins University, four scenarios were compared for the period 2025–2027: uniform annual excise increases without simplification, simplification of machine-rolled cigarette tiers, simplification of hand-rolled cigarette tiers, and a no-reform scenario (status quo).

The findings show that all three reform scenarios outperform the no-reform scenario across fiscal and public health dimensions. Scenario 3—combining excise increases with hand-rolled tier simplification—yields the strongest outcomes: cumulative excise revenue growth of up to 31% (60 trillion rupiah), total consumption reduction of up to 16% (51 billion sticks), a 1.6% decline in adult smoking prevalence, and an estimated 292,324 premature deaths averted.

These findings highlight the importance of combining excise tax increases with tier structure simplification, particularly targeting hand-rolled cigarette tiers, to maximize both fiscal and public health gains.