Bad News From Sri Mulyani's Subordinates: 100 Percent Discount On PPnBM Cars Not Extended After August Is Only 25 Percent Valid

JAKARTA - The Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, has ensured that the 100% discount on Sales Tax on Luxury Goods (PPnBM) for 1,500cc passenger cars that will expire in August 2021 will not be extended.

According to him, the decision has gone through several considerations, including taking into account the derivative industry in the automotive sector.

"For this incentive (policy), it seems that we are relatively comfortable", he said in a webinar on Wednesday, August 18.

To note, the application of the 100 percent PPnBM discount for 1,500cc passenger cars has actually been extended for two months or starting in July 2021. Previously the policy was implemented for the period March 1 to June 2021.

However, the government decided to extend the 100 percent PPnBM discount period until the middle of the third quarter of this year because the consumption potential of the automotive sector can still be optimized.

Actually, the validity period of the PPnBM discount can still be enjoyed by the public for the period from September to December 2021. However, the amount of discount received will be reduced to 25 percent.

"The incentives that have run out are actually continuing, namely for September to December of 25 percent, so there is still a discount", said Febrio.

Furthermore, in addition to passenger vehicles with a 1,500cc engine, the government also imposes the same easing for cars with a larger cc capacity.

First, cars with a capacity of more than 1,500cc to 2,500cc are given a 50 percent PPnBM discount for the tax period April to August 2021 and a 25 percent discount from September to December 2021.

Two, cars with a 4x4 drive system with cylinders of more than 1,500 cc to 2,500cc are subject to a 25 percent PPnBM incentive from April to August 2021 and a discount of 12.5 percent from September to December 2021.

"So this is a matter of fairness of incentives for each segment", said Febrio Kacaribu.

For information, the Ministry of Industry noted that currently the potential of the automotive sector is supported by 21 companies, with a total capacity of 2.35 million units per year and direct employment of 38 thousand people. In addition, more than 1.5 million people work along the industry value chain.

Meanwhile, according to data from the Association of Indonesian Automotive Industries (Gaikindo), retail sales, cumulatively, from January to April 2021 rose 5.9 percent YoY to 257,953 units. Every month, retail sales volume has approached the normal level of around 80,000 per month.