Sri Mulyani's Subordinates Answer The Issue Of Congestion In The Middle Of The Extension Of The PPnBM Incentive For Motor Vehicles

Illustration (Photo: Doc. Antara)

JAKARTA - Expert Staff of the Minister of Finance for Tax Compliance, Yon Arsal, responded to the issue of congestion on the implementation of the Sales Tax on Luxury Goods (PPnBM) incentives for motorized vehicles. According to him, the tax levy relaxation policy will not continue to be enforced and will only be temporary.

"This incentive is only temporary and unsustainable, so it will not apply in the future," he said in a virtual discussion organized by the Directorate General of Budget, Ministry of Finance, Tuesday, July 6.

Arsal added, because it is temporary, it is hoped that the impact of congestion will not occur.

"Because actually the contraction of the automotive industry is very deep, even minus 70 percent from the normal period and until now it has not returned," he added.

Furthermore, the subordinate of the Minister of Finance Sri Mulyani explained that the national automotive industry has a fairly long supply chain. He said that a lot of economic activity is based on this industry.

"The motor vehicle industry is one of the industries with a fairly long supply chain, starting from manufacturers, dealers, spare parts industry, to SMEs (small and medium enterprises) and this is in the country," he said.

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For this reason, the decision to provide PPnBM incentives of up to 0 percent on new vehicles has the intention of saving the domestic economy so that it can continue to be productive.

"With a long production chain and also a lot of liquidity in the banking system, we need to pull out this public money to spend it in order to circulate the economy, so it was decided that the car industry was one of the targets," he explained.

For information, the Minister of Finance (Menkeu) Sri Mulyani decided to extend the term PPnBM borne by the government for the purchase of a car with a 1,500 cc engine cubication until August 2021 from previously until June 2021.