Ministry Plans to Issue Sedan Tax Rule Change in February

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  • TEMPO.CO, Jakarta - Industry Minister Airlangga Hartarto is targeting the discussion to revise the tax imposed on sedan cars—excluding it from the luxury goods category—to be completed this month.

    "We are discussing it and hopefully it can be release this month," he said on Monday, Feb. 13

    Airlangga said his ministry proposed this change in a bid to encourage the increase of factory utilization. He said that from factories' capacity of 2 million vehicles, only 1.4 million are produced.

    "With incentives, the capacity will go up."

    Airlangga said Indonesia's automotive industry should note the demand for sedan cars from the world market. To date, he said, Indonesia mostly manufactures sports utility vehicle (SUV) and multi-purpose vehicle (MPV).

    The Industry Ministry is targeting Australia's market, which he said has potentials following the closure of many automotive factories in the country. Indonesian automakers have the opportunity to supply 2 million vehicles per year for Australia.

    Data from the Indonesian Automotive Industries Association (Gaikindo) noted that 2017, sedan sales reached 9,130 units, or just 0.8 percent of all four-wheeled vehicles' sales.

    Airlangga hopes that an incentive will encourage a shift from motorcycle to car market by 8.0 percent.


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