Reasons For The Government To Free Tax On Cars And Property: Save 6 Million Workers

Illustration. (Photo: Doc. Ministry of PUPR)

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani with several related ministers today officially rolled out PPnBM relaxation incentives for motorized vehicles until December 31, as well as property PPN (VAT) borne by the government (DTP) until August 31.

In her explanation, the Minister of Finance said that this tax discount policy had been legalized through the Minister of Finance Regulation (PMK) No.20/PMK.010/2021.

"The efforts made by the government are expected to accelerate the process of national economic recovery due to the impact of the pandemic", said Sri Mulyani, Monday, March 1.

The automotive sector was chosen because it is a labor-intensive type of industry. The government claims that this sector has 1.5 million direct workers and 4.5 million indirect workers.

Also, the automotive supporting industry contributed IDR 700 trillion to the 2019 GDP. Then there were around 7,000 factories that produced input products for the automotive industry.

Meanwhile, fiscal incentives to the property sector are based on the fact that this sector together with construction contributed significantly to GDP formation, from 7.8 percent in the 2000 period to 13.6 percent in 2020.

In terms of performance, growth in the property sector will contract in 2020 to minus 2 percent and construction to minus 3.3 percent.

Then, workers in the property sector also continued to increase from 2000 to 2016 and sloped slightly to 9.1 million in 2019.

The amount of PPnBM vehicle tax incentives and property VAT is estimated at IDR 7.9 trillion. This figure is included in the business world incentives which are targeted at IDR 58.46 trillion of the total 2021 PEN (National Economic Recovery) funds of IDR 699.43 trillion.