Headline: New Vehicle Tax Surcharge Burdens Indonesia‘s Auto Industry, Deterring Consumers
Subhead: Nationwide implementation set for January 5, 2025, with rates as high as 66%
Article:
In a move that could stifle Indonesia’s automobile industry and dampen consumer demand, a new vehicle tax surcharge, or ‘opsen,’ is set to be implemented nationwide starting January 5, 2025. This initiative, outlined in the recently passed Law No. 1/2022 concerning State Revenue and Expenditure Balance, introduces additional taxes on both Pajak Kendaraan Bermotor (PKB) and Bea Balik Nama Kendaraan Bermotor (BBNKB).
The new law stipulates that ‘opsen’ is an additional tax imposed at a certain percentage. The two types of vehicle taxes subject to this surcharge are PKB and BBNKB. The ‘opsen’ on PKB is imposed by regencies/cities on the base PKB, while the ‘opsen’ on BBNKB is imposed on the base BBNKB, both in accordance with relevant regulations. These surcharges will be collected by the local governments.
Industry insiders have expressed concern over the new tax surcharge. Minister of Industry Agus Gumiwang Kartasasmita has warned that the ‘opsen’ could cause distress within the automotive sector. "The most challenging aspect for both vehicle manufacturers and consumers is the ‘opsen,’ which is imposed by local governments," said Agus, as quoted by detikFinance.
The primary objective of introducing ‘opsen’ on PKB and BBNKB is to enable local governments to immediately receive their share of the provincial tax revenue. However, Minister Agus fears that the surcharge could deter local consumers from purchasing vehicles.
The rates for ‘opsen’ on PKB and BBNKB have been set at 66%, calculated based on the amount of the respective tax liabilities. For instance, if a vehicle is subject to an annual PKB of Rp 1,000,000, the ‘opsen’ would amount to Rp 660,000 (66% of Rp 1,000,000). Consequently, the total cost for vehicle taxes, including the ‘opsen,’ would be Rp 1,660,000.
To accommodate the ‘opsen’ rates, the maximum rates for the base taxes have been adjusted accordingly. Under the new law, the maximum PKB rate is set at 1.2% for the first ownership, with progressive rates up to 6% for subsequent vehicles. The maximum BBNKB rate, meanwhile, is capped at 12%.
The automotive industry and consumers alike are closely monitoring the implementation of this new tax surcharge, hoping that it will not unduly burden the sector or discourage vehicle purchases.
