The government plans to expand the relaxation of Sales Tax on Luxury Goods for cars with engine cylinder volumes of up to 2,500 cc. This is in line with President Joko Widodo's direction during a meeting with the Minister of Industry, Agus Gumiwang Kartasasmita.

"The time frame for the implementation of this policy will be evaluated," said Agus, as quoted from a press statement, Thursday (16/3).

Previously, Jokowi expressed his wish that cars with a capacity of 2,500 cc could get tax incentives during a pandemic. However, the car must have a Domestic Component Level of at least 70%.

Therefore, Agus will evaluate the policy. The discussion will be held by the Ministry of Industry together with the Coordinating Ministry for Economic Affairs and the Ministry of Finance.

The formula for the rules can be based on the amount of the cylinder capacity of a new car. In addition, it can also be combined with locally made components (local purchase). "Or only based on local purchase rules," he said.

The government welcomes the public interest in enjoying the relaxation. Agus also said that data on car purchase orders (PO) that received PPnBM stimulus increased by an average of 140.8%.

To that end, the government asked car manufacturers to immediately increase their utilization to meet the high market demand. "This is so that the reduction in vehicle prices can be in line with expectations and its implementation will be effective," said Agus.

The PPnBM relaxation policy began on March 1, 2021, for four-wheeled sedan and 4x2 KBM with engine capacities below 1500 cc, produced domestically, and must meet local purchasing requirements. This policy is valid until the end of the year.

The granting of relief is carried out in stages, namely a 100% tax discount in March-May, 50% in June-August, and a 25% tax discount in October-December 2021.

How is the car sales data at the beginning of this year? Check out the following Databoks:

 Previously, Center of Reform on Economics Research Director Piter Abdullah Redjalam stated that the 0% tax incentive program for new cars would not be significant if it targeted the lower middle class. The middle to lower class people experienced the largest decline in purchasing power among other groups due to layoffs resulting in loss of income for both formal and informal workers.

On the other hand, the upper middle class contributes to people's consumption by about 80%, the largest of the other groups. Piter said that if the level of consumption could be restored, the impact would be huge on demand growth.

He also suggested that incentives be given to consumers of vehicles over 1,500 cc. "It would be better if the incentives for new cars were targeted at the middle to upper class society," said Piter.

Nevertheless, the proposed PPnBM incentive policy for new cars for the upper middle class does not have to be of the same magnitude. "Maybe it could be a 50% tax cut so that both of these two groups of people can trigger the acceleration of consumption growth, especially in the automotive sector," he said.
Source : https://katadata.co.id/pingitaria/berita/6050b8ff3cd3d/menperin-sebut-jokowi-setuju-gratiskan-pajak-penjualan-mobil-2500-cc