Observers Agree With The DPR PKS Faction: Car Tax 0 Percent Doesn't Matter

Illustration. (Photo: Ministry of Industry)

JAKARTA - The government's proposal, in this case the Ministry of Industry, regarding the Abolition of Luxury Goods Sales Tax (PPnBM) and Transfer Fee for Motor Vehicles (BBNKB) for new cars up to zero percent has drawn criticism from various parties. One of them, Executive Director Indef Tauhid Ahmad.

He said the new car tax exemption would not have a significant impact on the stretching of the automotive sector. Because, in difficult conditions like today people tend to withhold their money for consumptive things.

"It does not really affect people's interest in buying. Now the situation of the upper middle class, even though the tax is deducted and so on, in the current situation they will not buy vehicles. They will buy vehicles when the economy recovers," he said, when contacted by VOI, Friday, September 25th.

According to Tauhid, instead of stirring up the automotive sector in the midst of the COVID-19 pandemic, exemption from tax on new cars of up to zero percent actually reduces state income.

Tauhid said that the characteristic of consumers in Indonesia is to purchase goods in the form of vehicles in installments. Thus, the tax exemption will not have a major impact and encourage interest in buying even though there is a reduction.

"On average, our consumers buy on credit. When on credit, of course they still have to estimate whether they have the ability to pay installments in the midst of a difficult economic situation. Except for cash, yes, but I'm sure it's not much. I think the majority of people we buy a vehicle, especially a car, it must be credit, "he said.

In addition, said Tauhid, this tax exemption is quite large, up to zero percent. Meanwhile, tax on new vehicles and tax on name transfer is one province's income. If this is done, it will have an impact on decreasing regional income. Moreover, regional economic income has also been cut a lot due to the pandemic.

"This will reduce regional income. I think this is important, sorry for the region if this is reduced," he explained.

Previously, disagreements regarding the elimination of the Luxury Goods Sales Tax (PPnBM) and the Transfer Fee for Motor Vehicles (BBNKB) for new cars of up to zero percent were also voiced by DPR Commission XI member Hidayatullah.

Hidayatullah assessed that in the midst of difficult conditions due to the COVID-19 pandemic, the government should show siding with the little people. Government assistance must target all groups, not just one particular group.

"Affirmation of partiality to the lowly people from the government must be there, not always tax incentives for certain groups," he said.

This group is very vulnerable to the impact of a pandemic. In addition, this group is also the most obedient of paying taxes, ranging from VAT to Pph 21.

"Direct tax incentives to them by eliminating two-wheeled taxes and SIM fees," he explained.

According to Hidayat, so far the government has exempted taxes on luxury goods, from luxury homes, branded bags, cruise ships to yachts.

"Right, the reasons often put forward are to increase transactions, but in fact it results in a real loss of potential tax revenue and a loss of public justice," he said.