JAKARTA. The Minister of Industry, Agus Gumiwang Kartasasmita, would propose a subsidy to cover a permanent 0% luxury goods tax (PPnBM), particularly for automotive products, only if the said industry could manufacture vehicles with a minimum of 80% local components.

Kartasasmita stated that the industry had reaped the benefits from 0% luxury goods tax throughout 2021, resulting in a 64% growth. This year, the luxury goods tax relaxation calls for a minimum of 60% local components. “I would try to negotiate for a permanent 0% PPnBM policy. The requirement is using 80% local components,” Kartasasmita asserted during the Opening Ceremony of GIIAS Surabaya 2021 today (9/12).

Kartasasmita further explained that the PPnBM subsidy was proven to bring positive effects. Even the automotive sector, which was brought under pressure by the pandemic, now achieves a growth rate of 64%. The automotive sector needs to be paid special attention as there are 21 four-or-more wheel vehicle industries with a production capacity of 35 million units per year.

Meanwhile, the manufacturers of vehicle spare parts amount to 319,000 companies, mostly dominated by MSMEs. They have absorbed 1.5 million direct workers and thousand of millions of indirect workers, along with investments worth IDR 150 trillion. (AM/ZH)