RRI.CO.ID, Jakarta - The UK Government will introduce excise duty stamps for vape products strengthened with advanced material and digital security features. This initiative marks a significant step in reinforcing government oversight of vape products not only through the physical excise stamp, but also through an integrated trackandtrace system that helps ensure only authenticated, compliant products reach consumers. The approach aims to protect public health and safeguard revenue by reducing the presence of counterfeit and illegal vape products on the market.

In recent years, the UK vape market has expanded rapidly, with youth usage becoming an issue of public concern. At the same time, declining consumption of conventional cigarettes has prompted authorities to secure revenue streams while tightening control over noncompliant products.

Importantly, such programs extend beyond excise stamp production. They enable rapid identification of non-compliant products and provide better visibility across the legitimate supply chain. Excise duty stamps serve as secure physical identifiers, while the embedded digital layer supports more efficient inspection, traceability, and authentication. Those systems help detect suspicious patterns and potential fraud across the supply chain, supported by secure audit devices for enforcement officers and consumer verification applications.

Trackandtrace excise systems are not new. Since 2005, similar solutions have been deployed in several jurisdictions, including U.S. states such as California, Michigan, and Massachusetts, or Asia and Malaysia. These systems ensure secure marking, independent traceability, and reliable authentication of excisable goods—an approach also highlighted by economist Dr. Hana Ross during a recent International Tax Stamp Association webinar outlining best practices for successful trackandtrace implementation.

Relevance for Indonesia

In Indonesia, excise stamps are one of the main instruments in the supervision and enforcement of excise products—even their specifications and designs are regulated in detail from year to year—for example, in 2025, the Directorate General of Customs and Excise (DJBC) regulation will be implemented, namely: PER-15/BC/2024 concerning the Physical Form, Specifications, and Design of Excise Stamps applicable to all excise products, one of which is electronic cigarettes or vapes.

At the same time, the electronic cigarette or vape market in Indonesia shows an increasing trend in revenue, with the DJBC recording vape excise revenue in 2024 of IDR 2.65 trillion, an increase of 43.7 per cent from IDR 1.84 trillion in 2023. On the other hand, along with the increase in the use of electronic cigarettes, illegal vape enforcement activities have also been carried out—for example, the destruction of illegal vape liquid in Yogyakarta with an estimated excise value of Rp2.58 billion.

Then there was also a case of excise stamp counterfeiting in Kudus Regency, which caused the state to lose up to Rp1.3 billion. The excise stamps for cigarette and vape liquid products were made by a printing house in the local area.

From this context, there is room for discussion on the implementation of policies to strengthen supervision and law enforcement. The purpose of the discussion is not to copy the British model but to adapt it to the characteristics of the cigarette industry and the current excise system in Indonesia. Important questions that arise include: how can violations and illegal cigarette production be prevented, detected, and identified early in the production process before illegal cigarettes reach the market? How can the production monitoring system be strengthened? If there is a ‘tracking’ element, what minimum data is most relevant and realistic to ensure that monitoring is more focused, effective, and does not cause an excessive administrative burden? More broadly, how can enforcement be strengthened, for example, by providing dedicated verification tools to consumers, retailers and enforcement officers, ensuring everyone can effectively support the fight against illicit trade?