PPnBM Discount Has Not Increased Sales
JAKARTA, KOMPAS — (20/9/2021) The government’s decision to extend the discount on Sales Tax on Luxury Goods Borne by the Government or PPnBM DTP 100 percent for motorized vehicles is considered not yet effective in encouraging car sales. People are still putting the brakes on spending for tertiary needs due to the uncertainty of the Covid-19 pandemic.
The government has decided to extend the 100 percent PPnBM DTP discount for motorized vehicles until the end of 2021. Previously, the incentives that have been in effect since March 2021 ended in August 2021. The request for an extension of the 100 percent PPnBM DTP discount was voiced by automotive industry players and by the Ministry of Industry.
The Ministry of Industry proposed an extension of PPnBM DTP by 100 percent for cars with cylinder volumes below 1,500 cc, 50 percent discount for cars with 1,500-2,500 cc cylinder volumes with 4×2 drives, and 25 percent discount for cars with the same capacity for 4×4 drives. The proposal was agreed by the Ministry of Finance through the Minister of Finance Regulation No. 120/PMK.010/21, which was applied on September 13, 2021.
The Executive Director of the Institute for Development on Economics and Finance (Indef) Tauhid Ahmad, Saturday (18/9/2021), said that the discount on PPnBM DTP for motorized vehicles only had a significant impact at the beginning of the policy. After that, the increase in sales was not too high.
According to him, this is because the middle class is still careful in spending money for tertiary needs in the midst of the pandemic. Moreover, the surge in Covid-19 cases due to the emergence of the Delta variant in July 2021 also brings uncertainty regarding the situation going forward, although currently the trend of daily cases is starting to fall and mobility is back up.
Based on data from the Association of Indonesian Automotive Industries (Gaikindo), in March 2021, when the new discount took effect, the realization of domestic car sales reached 84,900 units. However, that number then tended to fall. In April 2021, domestic car sales were 78,900 units and in May 2021 it fell again to 54,800 units.
Sales rose again in June 2021 to 72,700 units, but fell back in July 2021 to 66,600 units. This shows that the impact of PPnBM DTP incentives is not as significant as in March 2021, although it is still able to support car sales from not dipping too sharply during the pandemic.
Minister of Industry Agus Gumiwang Kartasasmita said that one of the factors driving the growth of the manufacturing sector in the second quarter of 2021 was the growth of the automotive industry, which reached 45.7 percent because it was supported by the application of PPnBM DTP 100 percent.
Data on sales of four-wheeled vehicles under 1,500 cc in January-August 2021 was recorded at 175,000 units. This number increased by 51 percent on an annual basis compared to the same period in 2020. As for cars above 1,500 cc, sales in January-August 2021 reached 44,680 units, up 64.4 percent from last year.
Head of the Fiscal Policy Agency, Febrio Kacaribu, believes that the extension of the policy will stimulate the consumption movement of the middle class. “This policy will not only have a significant impact on the demand side, but also on production. This is very crucial considering that the increase in production also has a positive impact on employment,” said Febrio. (AGE)
Source: Kompas Daily. Edition: Monday, 20 September 2021. Rubrik Ekonomi dan Bisnis. Page 10.
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