Govt maintains ceiling on luxury sales tax

Govt maintains ceiling on luxury sales tax

JAKARTA (JP): The government has decided to maintain the sales
tax ceiling on luxury goods at 35 percent, even though the new
tax laws, which went into effect early this month, allow for the
rate to be raised as high as 50 percent.

"The government does not yet see it necessary to apply the
maximum luxury sales tax rate," Tax Director General Fuad
Bawazier said.

The new luxury sales tax rates will remain in the same 10
percent to 35 percent range as before. The rates, stipulated in
the decrees released yesterday by the Minister of Finance, are to
go into effect immediately.

It should be noted, though, that the luxury sales tax is
applied on top of the 10 percent value added tax.

Finance Minister's Decree No. 644 sets a 10 percent luxury
sales tax on: Dairy products, yogurt, cocoa, whey, fruit and
vegetable juices, beverages -- including mineral water --
perfumes and toilet waters, beauty or make-up preparations and
preparations for the care of skin and for use on hair, pre-shave
and shaving or after-shave preparations, household utensils such
as refrigerators, heaters, stoves, ranges, grates and cooks,
storage water heaters and immersion heaters, TV receivers and
video recorders and luxury houses.

Goods which are subject to 20 percent luxury sales tax
include: Carpets, sanitary wares and parts, except those made of
plastics, cement and galvanized iron, photographic films and
instant print films in rolls, lenses, prisms, mirrors and other
optical elements, binoculars, cameras, microphones, record
players, magnetic tape recorders, magnetic discs, records, tapes
and other recorded media for sound, air-conditioning machines,
pianos and other musical instruments.

Goods which are subject to a 35 percent luxury sales tax
include: Alcoholic drinks, including beer made from malt,
vermouth, cider and perry and indentured ethyl alcohol, saddlery
and harness for any animal, trunks, suit cases, brief cases,
handbags, traveling bags, toilet bags, articles of apparel of
furskin and artificial fur, footwear, except those made locally,
worked monumental or building stones, granite, mosaic cubes,
wares made from lead crystal, foreign-made tableware, kitchenware
and other household articles, foreign-made articles of ceramic,
wrist watches and other watches, articles of jewelry, diamond,
aircraft for private use, cruise ships, golf clubs and other golf
equipment, sports diving equipment, chandeliers and other
electric ceiling and video games.

Motor vehicles

The government also maintained the rates of the luxury sales
tax on motor vehicles at 20 percent, 25 percent and 35 percent.

The 20 percent luxury sales tax is imposed on imports of
motorcycles (including mopeds), with a capacity of up to 250 cc
and on the transfer of sedan, station wagon with a capacity of up
to 1,600 cc and on the sales of jeeps assembled with 60 percent
locally made components, and the transfer of light commercial
cars to be used for public transportation.

The 25 percent tariff is imposed on imports and transfer of
combi's, minibuses, vans and pick-ups using diesel fuel, the
transfer of minibus chassis or pick-up which would be modified
into minibus, vans and combi, using gasoline fuel.

The 35 tariff is set on the transfer of motorcycles with a
capacity of above 250 cc, on imports of buses, on imports and the
transfer of sedans, station wagons and jeeps with a capacity of
above 1,600 cc, racer car and caravan.

Imports and the transfer of motorcycles and four-wheeled
vehicles to be officially used by police and other units of the
Armed Forces are exempted from the luxury sales tax.

Imports and transfer of vehicles to be used as ambulances,
prisoners' cars, and as public and cargo transportations are also
exempted from the luxury sale tax.(vin/hen)