Take Note! These Types Of Cars Get Tax Discounts

Car show illustration (doc. Antara)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) has prepared an incentive policy for reducing the PPnBM rate (tax discount) for motorized vehicles, especially new cars. The policy will take effect in March 2021.

Coordinating Minister for the Economy Airlangga Hartarto said last week that the government was preparing an incentive to reduce the tax (PPnBM) for vehicles in the car segment with a cubic engine of 1,500 cc engine and below, namely for passenger cars and sedans (4x2).

The car segment with the requirements for the cubication of a 1,500 cc engine and under with 4×2 driving is quite wide, ranging from the family car segment, multi-purpose vehicle (MPV), sedans, to sport utility vehicles (SUV).

The implementation of the PPnBM relaxation is expected to stimulate the national automotive industry which involves many supporting industries in it, and also encourage the use of components with domestic content levels (TKDN) reaching 60-70 percent.

"The hope is that with the incentives provided for motorized vehicles, the consumption of middle and upper-income people will increase, increase the utilization of the automotive industry and encourage economic growth in the first quarter of this year", said Airlangga, as quoted by Antara, Monday, February 15.

Airlangga said that the 0 percent PPnBM relaxation was expected to increase people's purchasing power and provide a positive boost to the economy.

PPnBM incentives will be promoted in stages, with details, Phase I from March to May for a 100 percent reduction in PPnBM, Phase II from June to August by 50 percent and Phase III from September to November by 25 percent.

Currently, PPnBM is applied to vehicles based on engine cubication, including <1,500 4x2 (10 percent), 1,500-2,500 4x2 (20 percent), <1,500 4x2 sedan (30 percent), 1,500 4x4 (30 percent), 1,500-3,000 gasoline 4x4 (40 percent),> 2,500 diesel 4x2 and 4x4 (125 percent) and> 3,000 gasoline 4x2 - 4x4 (125 percent), citing Ministry of Finance Regulation (PMK) No. 33/PMK.010/ 2017.

However, the public needs to understand that not all types of cars get PPnBM relief, but only cars with a cubic engine of 1,500 cc and below with two wheels (4x2) or one axle.

Another type that gets PPnBM relaxation is the sedan type with a cubic engine of 1,500 cc and below.

If it is outlined, the type of car that gets 0 percent relief is the Low Multi-Purpose Vehicle (MPV) type. The sport utility vehicle (SUV) segment also gets incentives, especially the Low SUV type. The sedan segment will also get relief, especially for those with engines of 1,500cc and below.

The energy-saving and affordable (KBH2) or Low-Cost Green Car type cars have received 0 percent PPnBM, but will be subject to a 3 percent tax starting October 2021 referring to PP No. 73 of 2019 concerning Taxable Goods Classified as Luxury in the Form of Motorized Vehicles Subject to PPnBM.