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Indonesia To Slash Taxes On Large Passenger Cars

by Mary Swire, Tax-News.com, Hong Kong

15 August 2017


Indonesia is considering cutting the tax rate on sedan cars to support the nation's efforts to become the largest car manufacturing state in the region.

Sedans are currently categorized as a luxury good for tax purposes and therefore face tax rates twice as high as for other competing vehicles, of between 30 and 40 percent (depending on engine size).

The tax regime in Indonesia is thought be holding back growth for this industry segment, with very few consumers currently purchasing sedan cars and opting instead for MPVs or sports utility vehicles (SUVs).

The Government said that an amendment to the territory's value-added tax and luxury goods sales tax law would be tabled to equalize the playing field.

TAGS: Finance | tax | value added tax (VAT) | sales tax | law | manufacturing | tax rates | Indonesia | Tax

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