Anti-luxury car group praises higher taxes on snazzy automobiles
Anti-luxury car group praises higher taxes on snazzy automobiles
JAKARTA (JP): Anti-luxury car activists welcomed on Tuesday
the government's decision to hike sales tax on luxury cars,
saying the rise was positive to help push luxury cars out from
the streets, but car dealers said the ruling would not deter rich
people from buying the cars.
But MS Jihad, the head of the Anti-Luxury Cars Movement
(GAMM), hoped the government to impose additional rulings to
further cut down the number of luxury cars in the country.
"We hope the government would impose additional rulings to
significantly reduce luxury cars from the streets," he told The
Jakarta Post.
President Megawati Soekarnoputri has signed a decree,
stipulating that sales tax on luxury cars and motorcycles will be
raised to up to 75 percent effective as of September.
According to the decree, 10-passenger vehicles with engine
capacities of between 2,500 cc and 3,000 cc will be subject to a
30 percent tax, compared to the current rate of 20 percent.
Vehicles with engine capacities of between 3,000 cc and 4,000
cc; diesel vehicles with engine capacities of between 2,500 cc
and 3,500 cc; as well as trailer and semi trailer of caravan type
vehicles will be subject to 75 percent tax, up from between 30
percent and 50 percent at present.
According to the decree, motorcycle with engine capacities of
between 250 cc and 500 cc will subject to 60 percent from 50
percent previously, while motorcycle with engine capacities of
500 cc and over will subject to 75 percent tax from 60 percent
previously.
GAMM had previously demanded the government to reimpose the
300 percent import duty on luxury cars. The government lowered
the import duty to 155 percent in June last year.
Meanwhile, the Association of Indonesian Automotive Industries
(Gaikindo) played down the impact of the new ruling to the luxury
car sales, saying that the policy would not stop car aficionados
from buying luxury cars.
Gaikindo's chairman Bambang Trisulo said the rise in sales tax
which would automatically increase the selling price of the
luxury cars would not discourage high-income buyers from
purchasing such cars.
"They can still afford purchasing the cars," Bambang told The
Post.
Bambang also said the ruling would not hurt the country's auto
market because the luxury car segment only represented less than
five percent of the total domestic auto sales.
Gaikindo predicted the country's car sales to reach 280,000
units this year, slightly down from last year's 300,000.
"That's why we have no objection to the new ruling. We can
understand the policy given that the government need fund to plug
in its yawning budget deficit," he said, adding that the new
policy had been informed to auto business players since February
this year.
But nevertheless distributors of luxury cars including PT BMW
Indonesia, PT DaimlerChrysler Indonesia, and PT Prima Auto
Grupindo (the distributor of Jaguar cars) were surprised with the
new policy.
Paulus B.Suranto, head of marketing at PT BMW Indonesia, the
local sole distributor of German-made BMW cars said he had yet to
be well notified about the new policy.
"The rise of the taxes will certainly impact to the price, but
we have yet to predict how far it will affect our car sales,"
Paulus said. (03)