Gaikindo Asks Government to Harmonize Luxury Goods Tax Regulation

By : Ridwan And Aldi Firhand. A | Wednesday, February 07 2018 - 21:13 IWST

Illustration of Luxury Goods

INDUSTRY.co.id - Jakarta, The Association of Indonesian Automotive Industries (Gaikindo) Yohannes Nangoi expects the government to immediately harmonize the Sales Tax on Luxury Goods (PpnBM) regulation.

According to him, the harmonization of regulation of PpnBM can increase the growth of motor vehicle sales. Specifically, for the category of passenger vehicles.

Chairman of Gaikindo Yohannes Nangoi said the growth of sedan car sales is still low because PPnBM is relatively high, reaching 30 percent. That figure is much lower than the PpnBM multi-purpose vehicle (Multi Purpose Vehicle / MPV) which is only 10 percent.

"Last year's Sedan growth was minus 34 percent, MPV minus 2 percent." Hopefully there will be a harmonization of tariffs (taxes), so it could be better, "said Yohannes in Jakarta (6/1/2018).

He realizes that the government needs income from luxury taxes. But, Yohannes hopes there is a tax policy that harmonizes the interests of government and employers.

"Unlike now, (sales) Sedan continues to shrink, so there is no one who builds a factory (car) Sedan in Indonesia," he said.

In fact, he claims world market demand for vehicles Sedan type is still quite large. Therefore, the presence of domestic sedan factories can open opportunities for automotive exports. For example, according to Yohannes, the market in Australia absorbs 1.2 million units of motor vehicles that are all imported goods.

"We have helped by providing inputs in cooperation with the neutral and academic institutions, which we have submitted on December 12, 2017," he said.

Regarding the harmonization of luxury goods tax rules for motor vehicles that are being processed by the government. Gaikindo also proposed four main points to the government relating to carbon tex or emissions tax, low cost green car (LCGC) vehicles, low carbon emission vehicle (LCEV) vehicles and related to vehicle shape categories.

"Today there is still a division of categorization between Sedan, MPV, SUV, etc. We propose for it to be eliminated," he said.

Yohannes said Gaikindo recommends that the government implement regulations in accordance with international standards, that there are only categories of vehicles with a capacity of over 10 passengers or below.

"As to which taxes are rising and falling, that will be the government's decision," he said.