The Ministry of Industry (Kemenperin) proposes relaxation of the Sales Tax on Luxury Goods (PPnBM) with the Government borne (DTP) scheme of 100% for the purchase of new cars, which can be extended until the end of the year. The PPnBM DTP policy since March 2021 has proven to have revived the automotive industry in the midst of a pandemic.
"I have signed a letter to the Minister of Finance (Sri Mulyani), to propose an extension of PPnBM DTP, because it has to do with the supporting industries behind it," said Industry Minister Agus Gumiwang Kartasasmita in a Working Meeting with Commission VII DPR RI, Wednesday (25/8). ).
Agus said this incentive was very successful in boosting car production and sales. From his records, car sales in Q2 2021 jumped sharply after this incentive. "It's no joke that in the second quarter, the increase in car sales rose 758% when compared to the same period the previous year," he said.
For information, the 100% discount on PPnBM DTP for the purchase of a new car with a cylinder capacity of up to 1,500 cc will end at the end of August. For the tax period from September to December, the discount on PPnBM provided by the government is only 25%. Meanwhile, for cars with a cylinder capacity of more than 1,500 cc to 2,500 cc, the PPnBM discount during the September to December tax period will be 25%, from the previous 50% in April-August. Agus Gumiwang said that the proposed extension is closely related to supporting industries in the automotive sector. There are around 1.5 million workers along the industrial chain of the automotive sector, these factors are considered to play a major role in the growth of the domestic industry. "So, there are tier I, tier II, tier III, not to mention the small and medium industries (IKM) involved in it are extraordinary, so the industry can grow," he said.
In addition, Agus also encourages value added tax (VAT) incentives with the government borne tax (DTP) scheme for the property sector because it has proven successful in boosting sales. From his records, property sales rose 15%-20%. The tax incentive facility also encourages the growth of the surrounding industries such as cement, ceramics, and building materials where the increase is estimated to reach 8.05%.
"We also encourage VAT DTP in the property sector, because this is a sector with a very large supporting industry. So we choose any sector with large supporting industries to get relaxation. The goal is to increase our demand side capability," he said.
For information, the government provides VAT in the tax scheme borne by the government on the sale of landed houses or residential units for the tax period March-August 2021. A 100% discount is given for landed houses or apartment units with a maximum selling price of Rp 2 billion. 50% discount for landed houses or apartment units with selling prices above IDR 2 billion to IDR 5 billion.
Previously, Chairman of the Association of Indonesian Automotive Industries (Gaikindo) Yohannes Nangoi hoped that the PPnBM incentive was extended until the end of 2021, because this incentive had saved the automotive sector from the impact of the Covid-19 pandemic.
Gaikindo noted that car demand reached its lowest point in April to June 2020. Total car sales were only 7,868 units in April, 3,551 units in May, and 12,623 units in June. However, after the relaxation of PPnBM was implemented in March 2021, sales rose to 80 thousand units, close to the normal point of 100 units of cars in one month.
Based on GAIKINDO sales data for the January-July 2021 period, car production was recorded at 588,881 units, or up 49.4% from the same period last year, while sales reached 460,105 units, up 40.8%. Exports of completely built up cars (CBU) were recorded at 166,069 units, up 38.2 percent. New car sales in the January-July 2021 period were recorded at 460,105 units. That figure is close to full-year sales in 2020 which amounted to 532,027 units. "For this reason, GAIKINDO hopes that the relaxation of PPnBM can be extended until the end of 2021. We hope that PPnBM will be until the end of 2021 so that the automotive industry recovers completely," said Yohannes in a written statement, quoted Wednesday (25/8).
