The Jakarta Post
The Association of Indonesian Automotive Manufacturers (Gaikindo) has expressed its support of an Industry Ministry suggestion to decrease the added value-tax for luxury goods (PPnBM), particularly sedans, to increase sales both in domestic and international markets.
“Currently, there is no one producing sedans here because the tax is expensive. [The car] is difficult to sell,” said Gaikindo deputy chairman Jongkie Sugiarto in Jakarta on Sunday as quoted by kontan.co.id.
The Industry Ministry had reportedly proposed the tax cut to the Finance Ministry.
Jongkie emphasized that the tax cut would not only boost exports but also production, which would be followed by a sales increase in the domestic market.
He expressed his concern that the government is focusing only on developing multipurpose vehicles (MVP), while the international market is dominated by sedans.
“If we compare the situation to a restaurant, Indonesia only sells friend rice, while Thailand sells friend rice, soup and so on. Thailand produces sedans, SUVs [sports utility vehicle], MPV, pick-up trucks; the country produces nearly all kinds [of vehicles],” Jongkie said.
He added that Gaikindo had carried out a study on the issue with the University of Indonesia’s (UI) Public and Economic Investigation Institute and the results had been presented to the government in January.
The study deals with four issues: emission excise, zero percent PPnBM for environmentally friendly vehicles, low carbon emission vehicles and a call for the government not to differentiate between tariffs for all kinds of vehicles. (bbn)