Indonesian government provided another luxury goods tax for cars with cylinder capacities more than 1,500 cc to 2,500 cc - Photo by Finance Ministry Office

JAKARTA (TheInsiderStories) – Indonesian government provided another luxury goods tax for cars with cylinder capacities more than 1,500 cc to 2,500 cc, finance ministry announced on Thursday (04/01). The policy is stipulated in the Minister of Finance Regulation Number 31/PMK.010/2021 concerning Sales Tax on Luxury Goods for the Delivery of Luxury Taxable Goods in the Form of Certain Motor Vehicles Borne by the Government and will be effective since April 1, 2021.

In details, the tax discount divided in two classifications. First, for vehicle less than 10 people, including drivers other than sedans or station wagons, with ignition or compression ignition engines  with a single axle drive system (4×2) given a 50 percent of tax discount  April 1 to August 2021. Then, a 25 percent discount from September 2021 to December 2021.

Then, motorized vehicles for the transport of less than ten people, including drivers other than sedans or station wagons, with ignition or compression ignition engines (diesel or semi-diesel) with a two-axle drive system (4×4) also a 25 percent discount starting April 1 to August 2021. Furthermore, the tax incentives reduce to 12.5 percent since September 2021 to December 2021.

Minister of finance, Sri Muluyani Indrawati, hope is that the automotive industry and its derivatives can experience a faster recovery after being hit quite badly due to the COVID-19 pandemic after get the tax incentives.  While, industry minister, Agus Gumiwang Kartasasmita stated, now there are 29 types of cars that can take advantage from the tax discount.

The vehicle variants are produced by six automotive companies in Indonesia, like PT Toyota Motor Manufacturing Indonesia, PT Astra Daihatsu Motor, PT Mitsubishi Motors Krama Yudha Indonesia, PT Honda Prospect Motor, PT Suzuki Motor Indonesia, and PT SGMW Motor Indonesia.

The types of motorized vehicles that get the facilities are mentioned in the Decree of the Minister of Industry Number 839 of 2021 concerning Motor Vehicles with Sales Tax on Luxury Goods for the delivery of taxable goods classified as luxury to be borne by the government in Fiscal Year 2021.

“Industrial companies that produce motorized vehicles and their products get tax relaxation must submit the local purchase plan to the ministry of industry, as well as submit a statement on the use of local purchase proceeds in production activities,” he said in an official statement on Thursday.

The Association of Indonesian Automotive Industries reported, the realization of car sales in February fell by 38.22 percent to 49,202 units compared to last year sold 79,644 units. When compared to the previous month, the car sales dropped by 7.5 percent from 52.909 units.

Written by Editorial Staff, Email: theinsiderstories@gmail.com