Sri Mulyani Said Tax on Luxury Goods Incentive For New Cars Reaching To IDR 2.99 Trillion

One type of four-wheeled vehicle that receives tax incentives from the government (Photo: Special)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani revealed that tax spending in the relaxation policy on Sales Tax on Luxury Goods (PPnBM) for motorized vehicles which came into effect on March 1, 2021, reached IDR 2.99 trillion.

Quoting the Ministry of Finance's broadcast, Sri Mulyani said that this was included in the fiscal incentive scheme to encourage public consumption and support the business world.

"The government hopes that the incentives can be used by the community to encourage improvements in the automotive industry and be able to boost national economic growth," he said, Monday, March 29.

According to him, the automotive industry is one of the manufacturing sectors that has a multiplier effect on other sectors. Sri Mulyani noted, in 2019 the automotive industry contributed 3.98 percent to the formation of Gross Domestic Product or GDP.

In addition, the automotive industry is believed to be one of the labor-intensive sectors that absorbs a large number of workers, namely 1.5 million direct workers, and 4.5 million indirect workers.

Then, the supply chain for this sector is also very broad, reaching around 7,451 factories producing input products for the automotive industry.

"We are deliberately designing it so that it can spur confidence and simultaneously increase economic recovery," he said.

For information, state revenue until February 2021 reached IDR 219.2 trillion, or 12.6 percent of the projected revenue this year.

This realization turned out to increase from the same period the previous year amounting to IDR 217.6 trillion. This means that the state income for the first two months of this year is better than the period before the 2020 pandemic.

Meanwhile, the tax, customs and excise revenue target in the 2021 State Budget is IDR 1,444.5 trillion.

Meanwhile, state spending until the close of February 2021 reached IDR 282.7 trillion, an increase of 1.2 percent from last year's realization.

This total expenditure is equivalent to 10.3 percent of the total state expenditure allocated for 2021 which amounted to IDR 2,750 trillion.