The Malang Customs and Excise Office has busted a syndicate selling fake cigarette tax stamps that has caused the state to incur a loss of Rp 10.449 billion (US$1 million), only a few days following a similar seizure in West Jakarta causing the state to lose Rp 560 billion.

Office head Parjiya said Tuesday that his men had detained four suspects, while they were still tracing the whereabouts of another person in Kudus, Central Java.

The suspects are identified by the initials MF, NA, ZA and NF.

The customs office seized 2,100,000 sheets of series III fake cigarette stamps printed in 2008 for machine-rolled clove, or kretek, cigarettes (SKM) worth Rp 3.402 billion.

Customs officers also seized copies of bank receipts of tax stamp sales since May 2008, worth Rp 7.047 billion and a Honda Jazz sedan.

Parjiya said his office had detected the circulation of forged cigarette tax stamps in the past few weeks, but only broke the case on May 17.

Officers received information that the suspects were dispatching the contraband from Kepanjen to Kendalpayak district, Malang regency, on Sunday. Officers followed the suspects, who were in the Honda Jazz sedan, to the Kusuma Hotel in Malang city.

They were searched, and officers found three reams of fake cigar-ette tax stamps in the car driven by MF.

Based on MF's confession, officers built the case and were able to arrest two other suspects, NA and ZA, who subsequently pointed at NF, a repeat offender in a similar case in early 2008.

During a raid on NF's house, officers found 25 reams of blank fake tax stamps.

"We were able to detect a fifth person in Kudus, believed to be the supplier of the contraband from suspect NF. Bank statements also led us in that direction," said Parjiya.

He declined to disclose the person who supplied the tax stamps for the sake of the investigation. His office is currently coordinating with the police.

Parjiya emphasized the syndicate in Malang was not related to the one in Jakarta.

Head of the Fiscal Policy Agency Anggito Abimanyu commended the customs office's success in uncovering the crime and emphasized the need for strict super-vision of cigarette companies in Indonesia.

"It's very important to mete out stiff sanctions against companies forging cigarette tax stamps because it is closely connected with government supervision," said Anggito.

He added the government would reduce cigarette production further so national cigarette production would reach a maximum of only 240 billion cigarettes.

"The government intends to increase cigarette tax every year so the number of those still able to buy cigarettes would naturally decrease due to the high price. This is aimed at supporting the Indonesia health program by 2015," said Anggito.

This year the government expects cigarette production to reach 204 billion sticks, or equivalent to Rp 53.3 trillion.

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