The government said that the new car tax discount (PPnBM) will be extended in 2022. This is considered to be reviving the automotive industry in various aspects. Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto said President Joko Widodo had approved the extension of the Luxury Goods Value Added Tax (PPnBM) incentive for automotive products. Cars with a selling price below Rp 200 million or LCGC (Low-Cost Green Car) are subject to PPnBM of 3 percent, and the government will cover all PPnBM in the first quarter of 2022. Responding to this discourse, Chairman I of the Association of Indonesian Automotive Industries (Gaikindo) Jongkie D Sugiarto said that this would revive the automotive industry. However, he also said he would still wait for the government's official decision. "We should wait until the government's decision comes out. In principle, Gaikindo welcomes the extension of the PPNBM DTP stimulus," he told Liputan6.com, Tuesday (18/1/2022).
Jongkie revealed several positive impacts from the extension of the tax discount. It is believed that this will revive various sectors of the country's vehicle industry. "Because of the positive impact on automotive sales, consumers can buy cars at affordable prices, car manufacturers and components return to work," he said. "The Central Government's income from VAT has also greatly increased, although for certain types of vehicles the PPnBM is not collected," he added. Meanwhile, local governments are also predicted to reap significant revenue or transfer fees from the Transfer of Names and Motor Vehicle Taxes due to the increasing volume of vehicles. "And the government does not provide any subsidies to the automotive industry," he said.
PPNBM Discount
Previously, Coordinating Minister Airlangga explained the workings of the PPNBM discount that had been approved by President Joko Widodo. "In the second quarter, 2 percent of PPnBM is borne by the government, in the third quarter 1 percent is borne by the government, in the fourth quarter (the public) pays in full, which is at the rate of 3 percent," said Airlangga, quoted from Antara, Monday (17/1/2022). Meanwhile, for automotive products costing Rp. 200 million to Rp. 250 million with a normal PPNBM rate of 15 percent, the government will bear half the PPnBM in the first quarter of 2022. "In the first quarter 50 percent (of PPnBM) was borne by the government, so the public paid 7.5 percent. In the second quarter (the public) paid 'full' of 15 percent," Airlangga added.
