Govt to issue incentives for low cost, green cars next month

The government is slated to issue new fiscal incentives for the planned low-cost and green car program next month, a minister says.

Industry Minister MS Hidayat said on Wednesday in Jakarta that his ministry and the Finance Ministry had already achieved approval for the issuance of the fiscal incentives which would be in the form of a reduced sales tax on luxury goods (PPnBM).

Earlier, the government had said it considered replacing the tax on luxury goods, which includes imported cars, with an excise duty, which was considered more flexible in implementation.

“We have reached final agreement [with the Finance Ministry]. Our subordinates will discuss technical matters and the procedure for the announcement. Hopefully, all will be ready in June,” Hidayat told reporters after meeting with Finance Minister Agus Martowardojo at his office.

Hidayat declined to comment further on the incentive. However, the government has said that the duty cut would be given according to the level of locally-sourced materials used, fuel consumption and

eco-friendly technology applied in the cars.