Sri Mulyani Advises the Public to Take Advantage of the New Car Tax Discount Page all

JAKARTA, KOMPAS.com – The government through the Ministry of Finance is finalizing the rules for the Sales Tax discount on Luxury Goods ( PPnBM) and hope that later the relaxation can be used by the community.

“We hope the public will respond. I know this is expected to increase the demand for motor vehicles again and encourage the automotive industry in Indonesia supply chain-it is quite important in our economy, “said the Minister of Finance Sri Mulyani Indrawati reported from Among, Wednesday (24/2/2021).

He will later issue a related Minister of Finance Regulation (PMK) new car tax discount and is targeted to take effect on March 1, 2021. The tax discount policy will later use PPnBM for cars borne by the government.

The PPnBM discount of 100 percent of the normal rate will be given in the first three months, then 50 percent of the normal rate in the following three months, and 25 percent of the normal rate in the third phase for the next four months.

Also read: About 0 Percent PPnBM Incentives, Is the Automotive Industry the Golden Boy of the Government?

The amount of tax discount will be evaluated for its effectiveness every three months. The tax discount is given for motorized vehicles with a segment of less or equal to 1,500 cc for the sedan and 4×2 category.

This segment was chosen because it is a segment that is of interest to the middle class and owning society local purchase above 70 percent.

“For PPnBM which is a motorized vehicle, we will immediately issue it. Now it is in the finalization process and that means harmonization, and then we will issue it,” said Sri Mulyani.

Head of the Fiscal Policy Agency (BKF) Febrio N Kacaribu added, PPnBM relaxation is expected to be able to encourage public consumption, especially the middle class, which during 2020 has been largely stifled due to limited mobility.

Also read: There is PPnBM exemption, car prices are Rp 23 million cheaper

“The middle class people consume a lot of basic needs, while for deciles 1 to 5 it has become the target of the PEN program, especially the Social Security program where they are helped and even shown by our poverty rate to be very helped so that the poverty rate is not too deep,” said Febrio.

PPnBM incentives, continued Febrio, are expected to boost public consumption starting in the first quarter of this year.

Febrio said that was the reason for the government to impose these incentives starting March 2021 so that the public could immediately take advantage of them.

“And that immediately encourages lending from banks so that the hope multiplier effect-it is directly we feel and one that is important too local purchase we set at least 70 percent, “said Febrio.

Also read: Sri Mulyani Immediately Complete the PPnBM Free Car Rules

“So far this is a domestic product and multiplier effect “for the creation of domestic employment and also the creation of GDP is also quite large,” said Febrio again.

Automotive is not a golden boy

Coordinating Minister for the Economy Airlangga Hartarto said incentives had actually been given to other industrial sectors. He said the government did not give the automotive industry incentives.

“The government has to look at one by one. Oil palm is ready, coal is ready, metal (mineral sector) is ready, jewelry is still in process. So the next big one is automotive,” said Airlangga, quoted from the broadcast. Compass TV.

According to him, during a pandemic like this, the government needs to provide incentives for a number of large industries to boost economic growth.

Also read: There is PpnBM Relaxation, Gaikindo Projection of Car Sales to Increase by 40 Percent

“The economy may (grow) if there is a stimulus for consumers. Now this PPnBM is a stimulus for consumers,” said the General Chairman of the Golkar Party.

He also said that this car PPnBM incentive was given quite selectively. This means, not targeting all car consumers in Indonesia. Incentives are only given for cars with the widest market share, especially those whose purchasing power has been affected by the pandemic.

“Because it is given for 1500cc and below. This means that it is for the public. What is 1500cc? It is a sedan, SUV, and MPV. These three types of cars are being pushed,” said Airlangga.

He said the government did not provide incentives for cars targeting the upper middle class market. He reiterated that the government was not giving birth to the automotive industry.

“But not those above 1500cc,” said Airlangga.

Also read: Discounted PPnBM, the Government is at Risk of Losing Revenues of up to IDR 2.3 Trillion

Example of implementing 0 percent PPnBM

The criteria for cars that are subject to a 0 percent tax from the government are quoted from Glad, namely cars with engine cubic of less than 1,500 cc and having two-wheel drive aka 4×2, including sedans, whose local content reaches 70 percent.

The types of cars that can get 0 percent PPnBM exemption include low class multi pupose vehicle (MPV) such as the Daihatsu Xenia, Mitsubishi Xpander, Suzuki Ertiga, Wuling Confero, Toyota Avanza, and Nissan Livina.

Other types of vehicles are low cost green car or LCGCs such as Toyota Agya, Honda Brio Satya, Toyota Calya, Daihatsu Sigra, and Daihatsu Ayla. Then a certain type of sedan ( PPnBM for sedan cars).

To note, when a new car purchase is made, there will be four types of new car taxes that will be imposed.

Also read: Economist Value of PPnBM Relaxation Can Boost Car Sales

These taxes are Value Added Tax / VAT (10 percent), PPnBM (10-125 percent), and local taxes such as Motor Vehicle Tax or PKB (around 2 percent) and Transfer of Motor Vehicle Title Fee or BBN KB (10-12.5 percent).

Still quoted from Glad, car buyers in the segment hatcback and sedans can be one that feels this relaxation. But what must be considered, not all cars can get this relief.

From the criteria stated, it is predicted that in the segment hatchback There are two models that have the potential for incentives, namely the Toyota Yaris and the Honda Jazz. Meanwhile in the sedan segment only the Toyota Vios.

To note, these cars are included in 4×2 passenger cars under 1,500 cc. However, Yaris and Jazz have a 10 percent PPnBM rate. Meanwhile, Vios, because it is classified as a sedan and sedan, gets a 30 percent PPnBM tax.

Also read: Get to know PPnBM, a tax that makes cars expensive goods in RI

In this relaxation time, Vios is arguably the model that gets the most incentives. Because there are no more cars in the sedan segment with 4×2 criteria with a capacity of below 1,500 cc, with local content reaching 70 percent.

As an illustration, the lowest type of Yaris is subject to an estimated PPnBM of 10 percent of the selling price or around IDR 26.625 million. Then, just reduce the selling price (Rp. 257.7 million) with PPnBM (Rp. 26.625 million). Then the result is Rp. 239,625 million.

Meanwhile, the highest type has PPnBM of IDR 30,425 million. The selling price is IDR 304,250 million minus IDR 30,425 million, so the price offered is IDR 273,825.

Also read: What is Tanah Girik and How do you manage it to become SHM?

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