TEMPO.CO, Jakarta - The Indonesian government is set to drop the luxury tax (PPnBM) on yachts effectively in the first quarter (Q1) of 2019.

“We advanced the discussions and would possibly be issued in this year’s Q1,” said Rofyanto Kurniawan, Head of Fiscal Policy Board’s Center for State Revenue Policy on Thursday, January 31.

Moreover, Rofyanto said that his office is still in talks on the policy which will be introduced in the form of the Government’s Revised Policy on goods overseen by the luxury tax. This move is hoped to spark yacht owners’ tax compliance.

Many yacht owners have yet registered themselves to avoid paying the 75 percent PPnBM tax. “Owners that have yet registered will automatically register and pay their added-value tax. If it’s free then they’ll pay the registration fee,” he said.

Other than added-value tax income, Rofyanto said that dropping the luxury tax on yachts will significantly boost the State’s income generated from tourism, especially considering that the government never significantly profited from the existing yacht PPnBM that generates a mere Rp10 billion this year.

Other items in the list considered to be dropped off of the list of luxury items are helicopters, artillery firearms, handguns, apartments, condominiums, and townhouses.

CAESAR AKBAR | FAJAR PEBRIANTO