Observer: Vehicle Loans To Mortgages Are The Most Affected Sector Of VAT Increases To 12 Percent

Illustration. (Photo: Doc. Antara)

Banking observers and practitioners of the payment system Arianto Muditomo said that vehicle credit, multipurpose credit, and mortgages were the banking credit sector most affected by the increase in VAT to 12 percent.

The government has set an increase in VAT to 12 percent only applies to luxury goods, namely motorized vehicles and goods other than motorized vehicles subject to sales tax on luxury goods (PPnBM), such as luxury housing.

"This vehicle, apart from being affected by VAT, there is also an impact on the motor vehicle tax (PKB) which has increased with the presence of an option (excess tax levy according to a certain percentage) of PKB," said Arianto Muditomo, quoted by Antara, Thursday, January 2.

Among the three banking credit sectors, he also said that the KPR was the sector that was least affected by the increase in VAT due to its long tenor of up to 20 years.

Although it has the potential to slow down credit disbursement, he stated that the increase in VAT to 12 percent will not have much impact on existing financing or bad credit (Non-Performing Loan/NPL) levels.

In addition to influencing credit disbursement, Arianto said that the increase in VAT could also reduce the collection of Third Party Funds (DPK) from the community.

He stated that this was not because the increase in VAT made people's interest in saving even less, but because the portion of income that could be set aside to save was running low.

"Because the DPK will come out more than the DPK will enter, because most of our customers (banking sectors in Indonesia) are individuals, not entrepreneurs," he added.

Regulation of the Minister of Finance (PMK) 131 of 2024 concerning the imposition of a 12-percent value added tax rate (VAT) starting to apply as of January 1, 2025.

Article 2 Paragraphs 2 and 3 of these rules stipulate that the 12 percent VAT rate is imposed on luxury goods, in the form of motorized vehicles and in addition to motorized vehicles subject to a sales tax on luxury goods (PPnBM).

Meanwhile, for goods and services outside the group, the VAT imposed is an effective tariff of 11 percent, which is obtained through the basic mechanism for imposition of taxes (DPP) of other values.

Another value in question is 11/12 of the import value, selling price, or replacement. Another value is then multiplied by a VAT rate of 12 percent.