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Govt signals tax incentives for all car purchases
The Industry Ministry has hinted at possibly expanding exemptions from the luxury sales tax and VAT to non-EVs in a bid to bolster the lagging car industry, though the announcement was short on details about the potential incentive.
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Industry Minister Agus Gumiwang Kartasasmita (center) addresses a press conference at the Industry Ministry in Jakarta on Nov. 25, 2024, flanked by the ministry’s Metals, Machinery, Transportation Equipment and Electronics Industry Director General Setia Diarta (left) and inspector general Mohammad Rum. (JP/Ruth Dea Juwita)
T
he government is considering a tax incentive to make cars more affordable in a bid to support the flagging automotive industry amid waning spending power, according to Industry Minister Agus Gumiwang Kartasasmita.
One proposed measure is to extend waivers of both the luxury sales tax (PPnBM) and value-added tax (PPN DTP), currently applicable to only electric vehicles, to all car types.
“We would give it not only for EVs but also other types of cars, such as hybrid and others. We discussed this yesterday,” Agus said on Thursday, as quoted by news agency Antara.
He did not explain whether the incentive would apply differently to non-EVs, as it was originally intended to encourage greater adoption of EVs.
Read also: Reluctance as govt pledges 6.5% wage hike next year
The announcement comes shortly after President Prabowo Subianto’s decision to implement a 6.5 percent minimum wage hike, which has been met with quiet acquiescence though the rate is lower than what labor groups had demanded.
The Confederation of Indonesian Trade Unions (KSPI) had called for a hike of 8 to 10 percent, based on inflation and economic growth rates of the past two years. KSPI chairman Said Iqbal nevertheless commended the President for finding a middle ground between workers’ welfare and industry interests.
