Indonesia plans to extend tax breaks on two-wheel drive cars
13/06/2021 04:33
JAKARTA, June 13 (Reuters) - Indonesia aims to extend a
luxury tax break on the sale of sedans and two-wheel drive cars
with engine power of less than 1,500 cc to August to support its
pandemic-hit automotive industry, the industry ministry said on
Sunday.
The tax was fully removed in March and was supposed to be
re-imposed at 50% from June. The 50% discount will now apply
from August to December. urn:newsml:reuters.com:*:nL4N2KI0F9
Industry Minister Agus Gumiwang Kartasasmita said the
extension of the lifting of the tax was aimed at revitalising
demand for a industry "that has consistently contributed
significantly to the national economy".
A spokesperson at the Finance Ministry said the plan was
being discussed.
Car sales in Southeast Asia's largest economy grew after the
tax break was introduced in March after months of sluggish sales
due to the pandemic but have yet to return to pre-pandemic
levels.
Total sales in 2020 were just over 532,000 units, about half
the previous year.
In April, the government introduced a 12.5%-50% tax discount
on the sale of four-wheel drives and cars with engine capacity
of up to 2,500 cc manufactured with at least 60% domestically
sourced components.
That discount is in effect until the end of
2021. urn:newsml:reuters.com:*:nL4N2LV0CU
Indonesia's car market is dominated by Japanese brands such
as Toyota 7203.T , Daihatsu 6023.T , Mitsubishi 7211.T and
Honda 7267.T .
Indonesia's gross domestic product contracted for the first
time since the 1998 Asian financial crisis last year, by 2.07%
with household consumption and investment declining.
(Reporting by Tabita Diela and Bernadette Christina Munthe;
Writing by Stanley Widianto; Editing by Robert Birsel)
((Widianto.Stanley@thomsonreuters.com;))