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By the new regulation for harmonization of luxury tax on vehicles, GAIKINDO hopes that Indonesia will produce more cars according to the global demands. (Image via Brilio)
Gaikindo seeks more export after PPnBM regulation
The harmonization of luxury tax (PPnBM) over vehicle stipulated in the Government Regulation (PP) No. 73 of 2019 is welcomed by the Association of Indonesia Automotive Industry (GAIKINDO). Optimistic, GAIKINDO stated that the harmonization will boost Indonesia’s automotive export according to the global demand.According to the data from the co-chairman of GAIKINDO, Jongkie D. Sugiarto, currently, Indonesia exports about 300,000 automotive units annually, and the harmonization is just what it needs to thrive further.
PP No. 73 of 2019 regulates about the imposing of PPnBM over vehicles according to its carbon emission. The previous regulation regulated the same over its chassis. Now, the lesser the carbon emission, the lighter will the PPnBM be.
The regulation was signed by President of Indonesia, Joko Widodo, generally known as Jokowi in mid-October and passed just a day after on 16 October. It will come into effect in 2021, two years from now.
For Jongkie, the regulation is just what the automotive manufacturer needs to answer global demand. Indonesia is well-known only as the manufacturer of the multi-purpose vehicle (MPV). However, statistically, sedans and pickups are sold out the most.
According to the previous regulation, PPnBM for sedans, station wagon, and 4x4 was as much as 30% - 125%. Meanwhile, PPnBM for MPV, SUV, and hatchbacks was at 10% - 125%. Thus, the automotive manufacturers in Indonesia were unwilling to produce other types than MPV despite its selling power and demand.
When the regulation is effective, Indonesian automotive manufacturers already made their own list of countries where they want to export their products. For Jongkie, two years are given for these automotive manufacturers to adjust the carbon emission of their cars.
Source: https://bit.ly/2NfiIlR
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