TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Govt extends tax cuts for purchase of new cars
The government will charge no luxury tax (PPnBM) on the purchase of new cars with engines below 1,500 cc in size until the end of August as it has extended by three months a waiver introduced earlier this year. Meanwhile, a 50 percent luxury tax cut will apply in the last quarter of the year.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
The government will charge no luxury tax (PPnBM) on the purchase of new cars with engines below 1,500 cc in size until the end of August as it has extended by three months a waiver introduced earlier this year. Meanwhile, a 50 percent luxury tax cut will apply in the last quarter of the year. (Shutterstock/Mikbiz)
T
he government has extended its temporary 100 percent cut on luxury tax (PPnBM) for new cars with below 1,500 cc engine capacity to the end of August, deeming the incentive effective for buoying the automotive industry amid the prolonged pandemic.
Industry Minister Agus Gumiwang Kartasasmita said that extending the tax incentive for another three months aimed to revive activities in the automotive industry, especially in manufacturing, which contributed significantly to the national economy.
"We must accelerate growth in the automotive industry, because this industry has many local businesses in its production chain, from the upstream to the downstream," Agus said in a press statement on Sunday.
According to data from the Association of Indonesian Automotive Manufacturers (Gaikindo), domestic car sales totaled 78,908 vehicles in April to mark an increase of 903 percent from April last year, when economic uncertainties and COVID-19 mobility restrictions hammered consumer demand.
Read also: Car sales dip 7% in April despite expanded tax cut
The 100 percent luxury tax cut for new two-wheel drive (2WD) vehicles with engine capacity below 1,500 cc now applies until the end of August instead of the end of May as originally set, to be followed by a 50 percent luxury tax cut for the succeeding three months.
The government had previously set a 50 percent cut for new car purchases from June to August, to be followed by a 25 percent new car tax cut for the remaining months of the year.
