Regarding PPnBM Extension, Sri Mulyani: Not Yet Decided, Mr. President Asks For Further Review

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani emphasized that the plan to distribute fiscal incentives for the Luxury Goods Sales Tax (PPnBM) for new cars in the 2022 National Economic Recovery (PEN) scheme, has not yet been decided. Sri said that it was still in the discussion stage.

"We haven't decided on the PPnBM for cars. The President asks for a review, especially regarding whether the demand has increased quite well," he said, in Jakarta, quoted on Saturday, January 1.

Sri said that the tax incentive that had been approved at this time was VAT on property DTP until June 2022. He explained his considerations because the property sector was still slumped by the COVID-19 pandemic.

Meanwhile, as to the fate of the extension of the new car tax discount itself, there is no further certainty. This is partly because the trade manufacturing sector is claimed to have started to move. Therefore, the use of fiscal incentive instruments will be carried out selectively.

"So we will use the instrument selectively. We will extend the VAT on housing but we will see the rules, it will be poured into the new PMK. Not yet on automotive," he explained.

As is known, after being extended a 100 percent discount or relaxation of the new car tax, it will end on December 31, 2021. If there is no certainty about the extension again in early 2022, the price of the car will immediately skyrocket.

Minister of Industry Agus Gumiwang Kartasasmita Tengah proposed discussion on PPnBM for cars under Rp250 million.

In the Minister of Industry's letter to the Minister of Finance Sri Mulyani, cars with prices below Rp. 250 million are proposed to get PPnBM of zero rupiah. Moreover, the realization of PPnBM incentives for automotive this year amounting to Rp6.58 trillion, another 100 percent from the initial allocation of Rp3.46 trillion, can be realized.