Sales Tax on Luxury Goods Relaxation Boosts Automotive Sales

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 17 November 2021
Category: News
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President Jokowi, accompanied by Cabinet Secretary Pramono Anung, delivers his statement after inspecting the Gaikindo Indonesia International Auto Show (GIIAS) at Indonesia Convention Exhibition (ICE), BSD City, Tangerang regency, Banten province on Wednesday (17/11). (Photo by: Presidential Secretariat/Lukas)

Automotive industry is one of industries affected by the COVID-19 pandemic in 2020. Therefore, the Government has issued policy on luxury goods sales tax (PPnBM) relaxation in order to boost car sales, according to President Joko “Jokowi” Widodo during his inspection to the Gaikindo Indonesia International Auto Show (GIIAS) at Indonesia Convention Exhibition (ICE), BSD City, Tangerang regency, Banten province on Wednesday (17/11).

This policy has created a positive impact that can be seen from the increase in production and sales in automotive industry. Thanks to the policy car sales have increased more than 60 percent.

For the record, PPnBM relaxation is regulated in Regulation of Minister of Finance (PMK) Number 20/PMK.010/2021.  It regulates incentive provision for 1,500 cc and below vehicles (sedan and 4×2 vehicle category) with local purchase component at least 70 percent.

The Government has also issued PMK Number 31/PMK.010/2021 and expanded the tax relaxation incentive for 1,500 cc to 2,500 cc vehicles (4×2 and 4×4 vehicle categories) with local purchase component at least 60 percent. It aims to stimulate public consumption.

Furthermore, through PMK Number 120/PMK.010/2021, the Government extends the PPnBM relaxation until December 2021.

On the occasion, the President was accompanied by Minister of Industry Agus Gumiwang Kartasasmita, Cabinet Secretary Pramono Anung, Vice Governor of Banten Andika Hazrumy, Regent of Tangerang Ahmed Zaki Iskandar, Chairperson of Gaikindo Yohannes Nangoi, and Project Officer of GIIAS Rizwan Alamsjah. (Presidential Secretariat/UN) (AP/MMB)

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