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Ministry of Industry Asks Cheap Tax for Sedan Exports

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The Ministry of Industry is proposing tax reductions for sedan-type vehicles that could increase sales, use of local components, and foreign exchange.

Current sedan tax rates are considered more expensive than other models such as sport utility vehicle (SUV) and multi purpose vehicle (MPV).

Airlangga Hartarto, Minister of Industry, expects that with increasing export demand for sedan cars can also increase state revenues. The move is an effort to develop the national automotive industry in order to be able to compete globally, this regulation will no longer distinguish the categories of cars, previously divided into two-box cars such as pickup, multipurpose cars (MPVs), and Versatile sports car (SUV), as well as three-box car (three-box car) that is a sedan.

According to him, the strategic policy will encourage the strengthening of vehicle industry structure in the country. In addition, it is expected to pursue the volume and value of car exports achieved by neighboring countries such as Thailand.

“Therefore, the government is spurring the national automotive industry to be able to export cars of 200,000 units this year,” Airlangga said in a press release received by Bisnis on Friday (11/08/2017).

Airlangga assess Indonesia has become a net exporter from the automotive industry sector. The automotive industry is one of the sectors that become the benchmark in the national economic growth. “Now our automotive production is increasing, which proves people’s purchasing power is still strong and the industry is still growing and our economy is still maintained at 5% level,” he said.

Vice President Jusuf Kalla said that the growth of car sales could indicate that the income of middle class does not decrease. In addition, an increase in car sales can also be boosted from the launch of the latest models.

Based on data from the Association of Indonesian Automotive Industries (Gaikindo), domestic car sales until June 2017 reached 533,537 units, up 0.3%. Projected in 2017 car sales could reach 1.1 million units. Meanwhile, for export in June 2017 reached 113,269 units or up 20.5%. Then, the national automotive industry also improves its performance by increasing its production capacity to 2.2 million units per year.

Meanwhile, I Gusti Putu Suryawirawan, Director General of Metal, Machinery, Transportation and Electronic Industry (Ilmate) said that the Ministry of Industry together with related stakeholders is finalizing the preparation of the automotive industry roadmap in line with the National Energy Policy and the Greenhouse Gas emission reduction targets GRK).

“It is hoped that this road map will be the guidance of relevant parties in implementing future programs that will support the achievement of energy targets in accordance with the mandate of KEN and RUEN, and at the same time reduce greenhouse gas emissions in accordance with the government’s commitment in front of COP21 forum,” he explained. Indonesia is committed to reducing greenhouse gas emissions by 29% on its own, and 41% with International assistance until 2030.

Putu explained that in the roadmap, the growth of the automotive industry in the future will be directed to the development of environmentally friendly vehicles and the reduction of greenhouse gas emissions. In addition, this roadmap will pay attention to the sustainability of investment, the growth of the automotive industry, and the contribution of the automotive sector to the national economy.

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