Excise Tax on New Motorcycles Can Be Implemented, Provided This Is Taken Into Account

KatadataOTO – The Directorate General of Customs and Excise (DJBC) of the Ministry of Finance (Kemenkeu) intends to conduct a study on the application of excise duty on new motorcycles. This is in order to increase state revenue.

However, the proposal immediately received rejection from many parties. Because it is considered to be a burden on the public.

Especially since Indonesia's economic condition is not doing well at the moment. Furthermore, sales of new two-wheeled vehicles are also sluggish.

However, the plan to apply excise duty on new motorcycles could be implemented by the government. But there are a number of factors that must be considered.

Photo : KatadataOTO

“If the economy improves, the application of motorcycle excise duty might (be) done gradually and selectively,” said Yannes Martinus Pasaribu, an automotive expert and academic from ITB (Bandung Institute of Technology) to KatadataOTO some time ago.

Yannes suggested the government formulate a policy with an adaptive approach. Such as prioritizing the balance between state revenue and the condition of the automotive industry.

For example, excise duty could be imposed on certain two-wheeled vehicles. For instance, those with large engine capacities or big bikes (moge).

Also including limited import products or luxury goods. This way, it can avoid pressure on the lower-middle market.

“The low-end market is the largest segment that is sensitive to price (increases),” Yannes continued.

Then the government must also ensure incentives for local producers. Including for the production of two-wheeled vehicle components domestically.

So that it can maintain inter-industry competitiveness when the excise duty for new motorcycles is applied in the future.

“(Incentives) such as relaxation of import duties on components or subsidies for environmentally friendly technology linked to the government's program towards a green transportation ecosystem in the future,” Yannes affirmed.

Must Be Aware of Negative Impacts

The application of excise duty on new motorcycles can also bring negative impacts for automotive players in the country.

Photo : Ducati Indonesia

“The government must protect the entire motorcycle ecosystem, from producers, existing local components, to assembly plants,” said Yannes.

He revealed that even without the excise duty, sales of new motorcycles in the country had already declined from January to March 2025.

Therefore, if an excise duty is applied to new motorcycles, it has the potential to make the two-wheeled vehicle market even more sluggish and less vibrant.