Ministry of Industry States 25 Regions Provide Relief for Motor Vehicle Tax Surcharge and Vehicle Ownership Transfer Fee

KatadataOTO – The PKB (Motor Vehicle Tax) and BBNKB (Vehicle Title Transfer Fee) surcharges have indeed been implemented. They have been in effect since January 5, 2025, in Indonesia.

However, it turns out that many regions are providing leniency, in order to accommodate car and motorcycle owners in the country.

“There are already 25 provinces that have implemented relaxations for the PKB and BBNKB surcharges. So, it is hoped that this will maintain the growth of the automotive sector,” said Setia Diarta, Director General of ILMATE (Metal, Machinery, Transportation Equipment, and Electronics Industry) of the Ministry of Industry, as quoted by Antara.

Setia explained that the above step is crucial for the automotive industry, considering the four-wheeled vehicle market is currently experiencing a contraction.

Photo : Korlantas Polri

In 2024, his party noted that the sector experienced a contraction of 16.2 percent. This was caused by a decrease in purchasing power and an increase in motor vehicle loan interest rates.

He detailed that production capacity was only 1.19 million units, down 14.3 percent year-on-year. Then, wholesales (shipments from factory to dealer) dropped by 13.9 percent to 865 thousand units.

Then, exports of CBU (Completely Built-Up) units decreased by 6.5 percent to 472 thousand units, forcing the Ministry of Industry to address this issue.

Therefore, the relaxation of the BBNKB surcharge and PKB is crucial, so that it can maintain public purchasing power this year.

In addition, there are a number of incentives from the government, such as a three percent discount on PPnBM DTP (Luxury Goods Value Added Tax Borne by the Government) for hybrid cars.

Then there is also a 10 percent VAT incentive for EVs (Electric Vehicles) which has been decided to continue in 2025.

“This policy is expected to provide tangible support for the sustainability of the national automotive industry, and then maintain competitiveness in both domestic and global markets,” he asserted.

As a reminder, a number of regions have indeed declared that they are implementing the PKB surcharge and BBNKB.

Photo : PDRD Module: Regional Tax Surcharge

However, they are also providing relief for motorists, as has been done by West Java, Central Java, East Java, Yogyakarta, and Banten.

All of the above provinces are not increasing motor vehicle taxes despite implementing the PKB and BBNKB surcharges this year.

By doing so, it is hoped that this can ease the burden on the public and then encourage them to buy two- or four-wheeled vehicles.