The Effectiveness of Implementing Tax Incentives for Sales Tax on Luxury Goods in the Manufacturing Industry during the COVID-19 Pandemic (a Case Study in Indonesia) †
- For motor vehicles in the 1500 cc segment for sedan and 4 × 2 categories, the Sales Tax on Luxury Goods tariff discount facility scheme is still the same as the previous arrangement, namely a tax discount of 100% for April up to May 2021 (continuing the Sales Tax on Luxury Goods discount for March 2021), a 50% discount on Sales Tax on Luxury Goods for the period of June to August and a 25% discount on Sales Tax on Luxury Goods for the period from September to December 2021.
- Tax discounts on additional 4 × 2 vehicle segments with engine capacities above 1500 cc to 2500 cc that meet the requirements are carried out in stages. A tax discount of 50% from the normal rate will be given during the tax period of April to August 2021, then 25% of the normal rate during the September to December 2021 tax period.
- Tax discounts on additional 4 × 4 vehicle segments with engine capacities from above 1500 cc. up to 2500 cc that meet the requirements are also carried out in stages. A tax discount of 25% from the normal rate will be given during the April to August 2021 tax period, then 12.5% of the normal rate during the September to December 2021 tax period .
2. Research Objectives
- Knowing the sales of motorized vehicles before and after the COVID-19 pandemic;
- Knowing the movement of Sales Tax on Luxury Goods incentives for motorized vehicles;
- Knowing the effectiveness of Sales Tax on Luxury Goods incentives for motorized vehicles.
- The legal factor itself (regulations or laws);
- Law enforcement factors, namely the parties that form and apply the law;
- Factors of facilities or facilities that support law enforcement;
- Community factors, namely the environment in which the law applies or is applied;
- Cultural factors, namely as a result of work, creativity, and taste based on human initiative in social life
3.2. Sales Tax on Luxury Goods
- Assembling, which combines loose parts of an item into semi-finished goods or finished goods. For example, assembling cars, electronics, and household furniture;
- Cooking, which is processing goods by heating, whether or not mixed with other ingredients;
- Mixing, i.e., uniting two or more elements to produce one or more other goods;
- Packaging, i.e., placing an item into an object to protect it from damage or increase its marketability;
- Bottling, that is, putting a drink or liquid into a bottle that is closed according to a certain method;
- Other activities similar to those activities carried out with the help of other people or business entities (Fiscal Policy Agency ).
3.3. Purchasing Managers Index (PMI)
5. Data Collection Technique
6. Data Analysis Technique
7. Result and Discussion
- Quarter 1, or January to March 2022—the LCGC or KBH2 category is not subject to Sales Tax on Luxury Goods tax (0 percent);
- Quarter 2, or April to June 2022—a 2 percent tax relaxation is given, buyers are subject to a 1 percent Sales Tax on Luxury Goods;
- Quarter 3, or July to September 2022—consumers will receive a 1 percent tax relaxation, buyers pay a 2 percent Sales Tax on Luxury Goods;
- Quarter 4, or October to December 2022—consumers are subject to the normal Sales Tax on Luxury Goods tax, or 3 percent.
- Quarter 1, or January to March 2022—for vehicles with a price of IDR 200 million to IDR 250 million, the Sales Tax on Luxury Goods tariff is 15 percent, and Sales Tax on Luxury Goods is subject to a 50% discount;
- Quarter 2, or April to June 2022—subject to normal tax, namely 15%, in accordance with the emission tax regulations that are in effect.
- Sales Tax on Luxury Goods incentives in the manufacturing sector are declared effective in helping the sector to survive and increase sales amidst the COVID-19 pandemic
- The results of the comparison of gaikindo.or.id data from 2019 to 2021 show that there was a significant decline in sales in the period of April 2020–December 2020, but after the implementation of Sales Tax on Luxury Goods incentives, there was an increase in sales, so that in 2021, sales in the manufacturing sector were more stable and tended to be normal.
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
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|LCGC Cars <1500 CC||Sales 2019 (Unit)||Sales 2020 (Unit)||Sales 2021 (Unit)|
|Non LCGC Cars|
IDR 200–250 M
|Sales 2019 (Unit)||Sales 2020 (Unit)||Sales 2021 (Unit)|
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Kusumastuti, H. The Effectiveness of Implementing Tax Incentives for Sales Tax on Luxury Goods in the Manufacturing Industry during the COVID-19 Pandemic (a Case Study in Indonesia). Proceedings 2022, 83, 67. https://doi.org/10.3390/proceedings2022083067
Kusumastuti H. The Effectiveness of Implementing Tax Incentives for Sales Tax on Luxury Goods in the Manufacturing Industry during the COVID-19 Pandemic (a Case Study in Indonesia). Proceedings. 2022; 83(1):67. https://doi.org/10.3390/proceedings2022083067Chicago/Turabian Style
Kusumastuti, Hadining. 2022. "The Effectiveness of Implementing Tax Incentives for Sales Tax on Luxury Goods in the Manufacturing Industry during the COVID-19 Pandemic (a Case Study in Indonesia)" Proceedings 83, no. 1: 67. https://doi.org/10.3390/proceedings2022083067