LCGC Cars Also Hit by 12 Percent VAT, Prices No Longer Cheap

KatadataOTO – President Prabowo has decided the 12 percent VAT will still proceed in 2025. However, it will not be applied to all sectors.

Instead, it will apply to goods or services classified as luxury. Such as yachts to houses with fantastic prices.

“The government has decided that the VAT rate increase from 11 percent to 12 percent will only be imposed on luxury goods and services, which have been consumed by the affluent and capable segments of society,” said Prabowo some time ago.

According to the number one person in Indonesia, the decision above was made as a form of their commitment not to burden the lower to middle-class society.

Photo : TrenOto

On the other hand, a similar statement was also made by Sri Mulyani, the Minister of Finance. According to her, the automotive sector will also be affected by the 12 percent VAT program.

"Luxury goods subject to the 12 percent VAT are those subject to PPnBM, regulated in PMK 15/2023 and PMK 42/2024. Such as private jets, cruise ships, yachts, houses or condominiums with prices above Rp 30 billion, as well as luxury motor vehicles," said Sri Mulyani 

For your information, the rules for cars subject to PPnBM are stipulated in the Minister of Finance Regulation number 141/PMK.010/2021.

It explains the Determination of Types of Motor Vehicles Subject to Sales Tax on Luxury Goods and the Procedures for Imposition, Granting, and Administration of Exemption and Refund of Sales Tax on Luxury Goods.

In article 2 of the above regulation, it is stated that the type of taxable goods classified as luxury includes motor vehicles for transporting people with fewer than ten passengers.

Then, having a cylinder content or engine capacity of up to 3,000 cc, is subject to PPnBM ranging from 40, 50, 60 to 70 percent.