Avanza Cs Is Selling Well Because Of Free Taxes, Big CC Cars Follow?

Workers are seen completing the process of assembling a new car. (Photo: By courtesy)

JAKARTA - The Minister of Industry (Menperin) Agus Gumiwang Kartasasmita is said to be preparing a plan to expand the Sales Tax on Luxury Goods (PPnBM) incentives for 0 percent of motorized vehicles for large engine capacity cars.

According to him, this is in line with President Joko Widodo (Jokowi) 's instructions to spur economic recovery during the pandemic.

"In accordance with the President's direction, the time frame for the implementation of this policy will be evaluated. Then, the rule formula can be based on the volume of cylinder contents combined with local purchases, or only based on local purchase rules, ”he said as quoted from the official website, Tuesday, March 16.

The Minister of Industry added that the President expressed the desire that four-wheeled motorized vehicles (KBM) with a capacity of 2,500 cc can also get tax incentives during this pandemic, as long as they have a Domestic Component Level (TKDN) of at least 70 percent.

"We see that the four-wheeled KBM purchase order data has increased by an average of 140 percent for products that have received a PPnBM stimulus," explained the Minister of Industry.

Therefore, the government welcomes the high public interest in enjoying this relaxation policy. Furthermore, the Ministry of Industry also asked producers to immediately increase utilization in order to meet high market demand.

"This is so that the reduction in vehicle prices can be in line with expectations and its implementation will be effective," said Agus.

For information, the PPnBM relaxation policy, which began on March 1, 2021, is provided for the four-wheeled KBM segment of the sedan and 4x2 with engine capacities below 1500 cc.

In addition, other requirements for products that enjoy this facility are domestically produced, and must meet local purchase requirements which include meeting the total use of components in at least 70 percent.

This policy will be in effect until the end of the year. The relief is given in stages, namely a 100 percent tax discount in March-May. Then, 50 percent in June-August, and 25 percent tax discount in October-December 2021.