Car Tax 0 Percent, Entrepreneur: Government Moves Something That Doesn't Sure Work

JAKARTA - News of zero percent car tax relaxation for the purchase of new cars has risen to the public. Previously, the proposal, which was believed to be able to raise car sales in the midst of a pandemic by the Ministry of Industry (Kemenperin), was rejected by the Minister of Finance in 2020.

However, Minister of Industry (Menperin) Agus Gumiwang Kartasasmita again proposed a sales tax incentive for luxury goods (PPnBM) for the purchase of this new car to President Joko Widodo (Jokowi). In fact, it is claimed that President Jokowi welcomed this, even though the decision was not final, because it was still being considered by the Ministry of Finance.

In response to this, Automotive Observer Bebin Djuana said the zero percent new car tax exemption policy proposed by the Minister of Industry, Agus Gumiwang, would make car entrepreneurs scream.

"What I'm worried about will definitely have an impact on used car entrepreneurs. It's definitely beating. Meanwhile, during the pandemic, if you look at the first half of 2020, car sales reached only 10 percent compared to 2019. So at that time the used car wheels were still rolling. Do you want to turn it off ?, "he said, when contacted by VOI, Monday, January 4.

Bebin said, like it or not, this policy will definitely have an impact on used car entrepreneurs. In fact, the heaviest impact caused sales to stop. Because of that, he questioned whether this had been taken into account by the government.

"Well, has this been taken into account? So this (the government) wants to move something big that doesn't necessarily work, because of what? The target market has arrived or not ?," he said.

According to Bebin, the objectives of this policy need to be questioned. This is because, he said, if those who get tax deductions are low cost green cars (LCGC) or low-cost environmentally friendly cars, then this policy is not appropriate.

The reason, said Bebin, was that the LCGC market was the community or group most affected by the COVID-19 pandemic. He admitted that he was not sure that the zero percent tax exemption would make people flock to buy cars to showrooms. Meanwhile, those who are currently able to pay in installments and are able to pay are the upper middle class.

Bebin assessed that this policy is also difficult to realize. This is because if the tax is cut to zero percent, it will have an impact on state income. In addition, this policy also intersects with the authority of the governor in each region. He also questioned whether the governors agreed with the new zero percent car tax policy.

"That's why I said the coordination was not that easy. Luxury goods tax, VAT, consider this discourse to be successful, then how many cars do you want to turn into? From Rp130 to Rp90 million? Then do people buy it in droves? I'm not sure. , "he said.

Furthermore, Bebin said, even if this policy was finally implemented, the results would not be as expected by the government. This is because the LCGC car market is the lower middle class whose consumption level has not yet recovered.

"We will see for me in the next 3 months whether the LCGC will increase (sales). It may increase, but not as expected. Meanwhile, the upper middle class wants to be cut or not when they need it to buy, it's finished. It means I hope the market will develop. naturally. According to ability there is no coercion, no need for stimulation, "he said.

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According to Bebin, instead of the government giving zero percent new car tax exemption for private cars, it would be better to give it to vehicles related to productivity. For example, for a package delivery car.

Furthermore, said Bebin, this is actually more useful for the benefit of many people. "This tax exemption is better for productive cars. For example, cars for delivering packages. So who is the LCGC using now? Who is the market ?," he said.

"There are no studies that observe who LCGC is using now? What I know is that up to 2019 the market has increased because online taxis are used," he explained.

General Manager of Carsome Indonesia, Delly Nugraha, said that the used car business has begun to improve after previously being affected by the COVID-19 pandemic. He said that demand for used cars began to rebound in the third quarter.

"Business growth at Carsome is starting to increase up to 300 percent," he said, in a virtual discussion last November.

Meanwhile, Herjanto Kosasih, Senior Marketing Manager for Used Car Sales at WTC Mangga Dua, also expressed his optimism for the trend of used car sales at the end of this year.

The graph of the increase in used car sales at WTC Mangga Dua began to show an increase since last August with sales of nearly 1,300 units. Although not normal yet, the numbers have increased.

He even believes that the demand for used cars will continue to increase by 90 percent towards the end of 2020. During the pandemic, he continued, people want to buy used cars because they are considered safer than taking public transportation.

Likewise, CARRO Co-Founder Aditya Lesmana said that the situation full of uncertainty due to the pandemic has actually created a spike in the buying and selling of used cars.

"During the COVID-19 pandemic, CARRO has experienced a 600 percent increase in demand for certified used cars that can be tested from home and purchased online," he said in an official statement, Wednesday, December 16, 2020.

According to the Indonesian Autos research by HSBC Global Research, 90 percent of respondents in Indonesia said they chose to use a private vehicle or private car as a means of transportation to avoid COVID-19.

Based on data from the Mandiri Institute Research Specialist, apart from the automotive industry being hit by COVID-19, car sales are predicted to increase by 38.7 percent or the equivalent of 843,000 units in 2021.

General Manager of Carsome Indonesia, Delly Nugraha, said that the Low MPV segment with players such as Avanza and Xpander is the most sought after by consumers.

"Because the car population is indeed large," he said, during a virtual discussion last November.

Likewise, Senior Marketing Manager of WTC Mangga Dua Used Car Sales, Herjanto Kosasih said at the WTC Mangga Dua used car center, Low MPV models such as the Xpander Cs are also targeted by consumers.

Optimism was also conveyed by the CEO of OLX Autos Indonesia, Johnny Widodo. OLX Autos, said Johnny, has conducted a survey of the used car market during the COVID-19 pandemic. In the survey, the used car market trend showed an improving condition driven by the imposition of Large-Scale Social Restrictions (PSBB).

"We believe the used car market will recover and return to normal as before the pandemic," said Johnny Widodo, CEO of OLX Autos Indonesia in an official statement some time ago.

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