Gaikindo Asks The Government To Extend Sales Tax Incentive On Luxury Goods Until The End Of 2021

JAKARTA - The Association of Indonesian Automotive Industries (Gaikindo) said the sales tax incentive on luxury goods or PPnBM could be extended until the end of 2021. Given that this incentive will end at the end of this month.

General Chairman of Gaikindo Yohannes Nangoi said he would send a letter requesting an extension of the application of PPnBM for motorized vehicles to the government. The reason is that this policy was able to save the automotive industry from the crisis due to the COVID-19 pandemic.

"We hope that the government will extend the relaxation of PPnBM until the end of the year. Of course, it will be better for the Indonesian automotive world or for all of us", he said in a virtual discussion, Thursday, August 19.

Furthermore, Nangoi also said that thanks to PPnBM incentives, the automotive industry was able to revive after last year's severe pressure from the COVID-19 pandemic. Moreover, in providing PPnBM incentives, the government does not spend any funds.

"Actually, the government did not spend money to provide this PPnBM. It even received input, but we'll see what the government will do until the end of the year", he explained.

On the same occasion, Chairman I of Gaikindo Jongkie Sugiarto said that the 100 percent extension of PPnBM was very much needed. Because, according to him, if there is no PPnBM, car prices will rise again and this will reduce public interest in buying vehicles.

"Actually, if it's not extended, the price of the car will go up. So if the price goes up, how will people who were ready to buy not buy it. This means that our analysis is not impossible, the 750 thousand units can go down to an estimated 60 thousand", he said.

For your information, the government imposes 100 percent PPnBM incentives for the purchase of new cars of 1.500 cc to 2.500 cc from March to August 31. The zero-percent PPnBM was originally only set until May but was extended.