Government Scraps Progressive Vehicle Tax and Motor Vehicle Ownership Transfer Fee

KatadataOTO – The West Sumatra Provincial Government has abolished the progressive tax for second or more vehicles and the Motor Vehicle Title Transfer Fee (BBNKB) II. This policy is implemented as an incentive for taxpayers in 2025.

This policy is expected to provide relief to the public and encourage an increase in Regional Original Revenue (PAD).

“Through this policy, people who own more than one vehicle can feel more relieved. So they will be more compliant in paying vehicle taxes," said Syefdinon, Head of the West Sumatra Regional Revenue Agency (Bapenda), as reported by Antara (10/02).

Not only that, the West Sumatra Provincial Government has also initiated a Tax Savings program for State Civil Apparatus (ASN). The goal is to ensure no one falls into arrears.

Photo : KatadataOTO

This is because based on a 2024 evaluation, there were at least 5,300 ASN in the West Sumatra Provincial Government who had not paid their motor vehicle tax. This number was then successfully reduced to around 2,700 ASN in January 2025.

However, looking more broadly at the district/city level, the number is still very large. At least 27,000 ASN have not fulfilled their obligations.

"Through the tax savings program, the issue of ASN in arrears can be resolved," he said.

He is also confident that with these policies, West Sumatra's PAD from vehicle taxes can be increased.

"Moreover, there is currently a budget efficiency policy. With maximum PAD, development in West Sumatra can continue despite the efficiency measures," he added.

Jakarta's Progressive Tax Increases

Unlike West Sumatra, the progressive tax in Jakarta has actually increased since January 5, 2025. The decision is stipulated in the Regional Regulation (Perda) of DKI Jakarta Province Number 1 of 2024 concerning Regional Taxes and Regional Levies.

"Motor vehicle ownership is based on the same name, population identification number and/or address," states Article 7 paragraph (4).

Jakarta's 2025 Progressive Vehicle Tax Rates

Photo : KatadataOTO

• 2 percent for the first motor vehicle ownership and/or control;
• 3 percent for the second motor vehicle ownership and/or control;
• 4 percent for the third motor vehicle ownership and/or control;
• 5 percent for the fourth motor vehicle ownership and/or control;
• 6 percent for the fifth and subsequent motor vehicle ownership and/or control.