The government plans to erase luxury tax on sedans?

Sedans used to be considered luxury cars showing high prestige. However, this view is changing, so the government is planning to erase luxury tax (PPnBM) on sedans.

Nevertheless, the Finance Ministry and the Industry Ministry are still deliberating the advantages and the risks of the plan. Inevitably, erasing the tax will also cut state revenue.

Currently, the government taxes luxury vehicles based on Finance Ministerial Regulation (PMK) No. 33/2017 which states that sedans or station wagons with compression-ignition engine or spark gap engine are subject to 30% luxury tax.

The figure is far higher than the 10%-20% tax levied on passenger cars such as MPVs.

The Industry Ministry suggested the plan on the grounds that sedans no longer fit to be categorized as luxury goods. That is why the Industry Ministry recommended erasing the luxury tax, which also goes with the strategy of Indonesia’s automotive industry.

Finance Minister Sri Mulyani said that her side was still deliberating the suggestion. Concerning tax, Sri stated that luxury tax erase and the revenue cut caused were not of great concern if the domestic industry seeks to reduce import. Moreover, the sector is not one of the greatest revenue contributors, she said as cited by CNN Indonesia, Friday (February 6).

Furthermore, Sri Mulyani said that the tax on sedans will be adapted according to domestic industry’s needs, just like how the Finance Ministry’s tariff team will consider the local content (TKDN) in calculating tax on electric cars and passenger cars.

Currently, domestic production of sedans has only reached 1.4 million to 1.5 million units each year. If the government really cancels the luxury tax levied on sedans, automatically the price of sedans in the market will decrease.

This is important because demand for sedans is thus predicted to increase. The target is to boost annual sedan production to 2 million units.

The plan will surely bring joy to sedan enthusiasts. However, you don’t need to wait too long until the plan is realized. There’s another way to own a sedan with competitive price, which is to buy a used sedan.

What you need to pay attention to is whether the seller guarantees that the sedan is still functioning well. For instance, the car has not been involved in an accident, because it might affect its chassis and stability.

Also make sure that the car has not been immersed in a flood that can damage its electrical system. The odometer must have not been tampered with either. The papers must also be authentic so that there will be no legal problems in the future.

mobil88, a subsidiary of PT Serasi Autoraya (SERA) that operates in used car trade, guarantees all the aforementioned aspects.

Hence, purchase of used sedans in mobil88, which is also part of Astra Group, comes with quality guarantee that gives a sense of security and convenience to the customers.