Good News For Those Who Want To Have A Big Car! Pajero, Fortuner, And Innova Have The Opportunity To Get Free Taxes

The Innova car assembly in one of Toyota's production facilities. (Photo: By courtesy)

JAKARTA - The positive impact of relaxing the Sales Tax on Luxury Goods (PPnBM) of 0 percent for four-wheeled vehicles with engine capacities below 1,500 cc is starting to show encouraging results.

The government, through the Ministry of Industry, claims the purchase order for cars that are included in the PPnBM exemption scheme has increased by up to 140 percent.

Most recently, Minister of Finance Sri Mulyani said in a Consultation Meeting with Commission XI of the DPR-RI that was held at the Senayan Parliament Complex, Jakarta on Monday, March 15, saying that the government is preparing plans to expand the coverage of PPnBM incentives. Later, this new policy will target vehicles with larger engine capacity.

"Currently we are making improvements to the policy formulation. As long as it meets the TKDN (domestic content level) requirements of up to 70 percent, it means that it might reach the 2,500 cc vehicle class", she said.

"This is also the answer to the demand for cars with a capacity above 1,500cc", continued the Minister.

Separately, the Minister of Industry Agus Gumiwang Kartasasmita said that the imposition of 0 percent PPnBM on cars with larger engine capacity was a direct instruction from President Joko Widodo (Jokowi).

"After being based on the capacity of the cylinder contents, now it is combined with local purchases", he said, Tuesday, March 16.

If this plan is realized, it is estimated that there are several types of cars that have the opportunity to receive PPnBM exemption, including the Toyota Fortuner, Toyota Innova, and Mitsubishi Pajero. The three cars are the best-selling car types in Indonesia which occupy the Sport Utility Vehicle (SUV) and Multi-Purpose Vehicle (MPV) segmentation.

It should be borne in mind that the latest draft policy currently being drafted by the government requires 70 percent TKDN. However, the minimum limit for the use of domestic components can still be negotiated between the government and automotive industry players because they have not reached a final agreement.