PPnBM Incentives Extended, Deputy Minister Of Finance: If It's Normal, Both Pay Taxes Again

JAKARTA - The government has again extended the discount on the Sales Tax on Government-Borrowed Luxury Goods (PPnBM DTP) for purchases of motorized vehicles up to 100 percent until December 2021.

Deputy Minister of Finance (Wamenkeu) Suahasil Nazara asked the public to take advantage of the incentives provided by the government.

“Initially, the incentive was 100 percent reduction until August. We just extended this. Please enjoy free PPnBM until December 2021," he said in a written statement, as quoted on Sunday, September 19.

Suahasil explained, the extension of the PPnBM discount was aimed at encouraging the acceleration of consumption, which had declined due to the emergence of the Delta COVID-19 variant. The extension of PPnBM is a complement to other discounts that are still given by the government, namely PPh 25, Final PPh for SMEs, and a reduction in corporate income tax.

“Now the delta variant is sloping, the transmission is sloping. It's time to make the production process even faster," he said.

The Sri Mulyani representative hoped that the extension of this incentive could generate people's purchasing power so as to help the national economic recovery.

“We want the incentives given to consumers to encourage them to buy motor vehicles. The motorized vehicle is then produced under 1,500 cc, the TKDN (domestic component level) is very high, employs workers, and can roll back income. This is what we see, the momentum we push. So for motorized vehicles, we give an extension," he explained.

Furthermore, Suahasil explained that the tax incentives provided were a form of government support to the business world during a crisis. When conditions return to normal, the Deputy Minister of Finance hopes that taxpayers will return to paying taxes according to the rules.

"We see that if the economic condition returns to normal, then business activities will run better. So at that time, we hope that we will both pay taxes again," said the Deputy Minister of Finance.

In accordance with Law Number 2 of 2020, the government is allowed to widen the deficit above 3 percent until 2022. Therefore, the government must carry out fiscal consolidation so that in 2023 the deficit can return to below 3 percent. , needed by the economy, can already add to the attractiveness of investment. We must design this so that the deficit will decrease gradually, not suddenly drop drastically. This is where then we need to maintain a balance in revenue, on state spending. We have to design it well,” concluded the Deputy Minister of Finance, Suahasil Nazara.