Page 4 - Newsletter (Increase of Tobacco Product Excise Rate & Re-stipulation of Sales Taxes on Luxury Goods for Motor Vehicles)

DDTC Newsletter Vol.02 | No.08 I November 2019 Page 4 of 7

Increase of Tobacco Product Excise Rate & Re-stipulation of
Sales Taxes on Luxury Goods for Motor Vehicles

Regulation No. 55 of 2019 concerning the Acceleration regulation is an amendment to the Minister of Finance
of the Battery Electric Vehicle Program for Road Regulation Number 64/PMK.011/2014 (MoF Reg. No.
Transportation (Presidential Reg. No. 55/2019). 64/2014).
Increase in Excise Rates on Tobacco
In more detail, vehicles with energy-efficient technology
and affordable prices are subject to a 15% rate with a tax Products
base of 20% of the selling price. Furthermore, vehicles
with full hybrid and/or mild hybrid technology with
a cylinder capacity up to 3,000 cc are subject to a 15% The Ministry of Finance of the Republic of Indonesia has
rate, but with varying tax base percentages. In contrast, decided to increase the tobacco products excise rates
vehicles with a cylinder capacity of more than 3,000 cc (cukai hasil tembakau/CHT) with a weighted average of
to 4,000 cc are imposed with a rate starting from 20% 23%. This increase will also be followed by an increase
to 30%, in retail sale prices (harga jual eceran/HJE) of tobacco
products.
In addition, vehicles with flexy engine technology (biofuel
100) are imposed with a rate of 15% with a tax base of The provision for the CHT rate increase is contained
1/3% of the selling price. Subsequently, vehicles with in the Minister of Finance Regulation Number 152/
plug-in hybrid electric vehicles, battery electric vehicles, PMK.010/2019 (MoF Reg. No. 152/2019) concerning the
or fuel cell electric vehicles are imposed with a STLGs Second Amendment to the Minister of Finance Regulation
rate of 15% with a tax base of 0%. Number 146/PMK.010/2017 (MoF Reg. No.146/2017)
concerning the CHT Rates. The regulation provides
Chapter Four describes the SLTGs rates for other types details of the new rates on CHT along with the threshold
of vehicles. Special vehicles for golf are imposed with for HJE per single or per gram of tobacco products,
a rate of 50%; vehicles for traveling on snow, beach, or including cigarettes.
mountains are imposed with a rate of 60%; while the
trailers and semi-trailers caravan for housing or camping The rate details are set forth in two attachments that are
are imposed with a rate of 95%. inseparable from this regulation. The first attachment
contains the details of HJE thresholds and CHT rates
The motor vehicles which are exempt from SLTGs per single or gram of domestically produced tobacco
remain the same as the previous regulation. This STLGs products. In addition, the second attachment contains
exemption is provided for motor vehicles used as details of the HJE threshold and CHT for imported
ambulances, hearses, fire engines, prisoner vehicles, tobacco products.
public transport vehicles, vehicles used for national
protocols, motor vehicle transport used as the official The threshold of HJE and CHT rates listed in these two
vehicles of the Indonesian Army (Tentara Nasional attachments will come into effect as of 1 January 2020.
Indonesia/TNI) or the National Police of the Republic of Nonetheless, with the issuance of a circular letter, the
Indonesia (Kepolisian Negara Republik Indonesia/POLRI), Head of the Directorate General of Customs and Excise
as well as motor vehicles used for the patrol purposes of will then re-stipulate the threshold of HJE and CHT rates
TNI or POLRI. thus they should not be lower than the rates listed in the
attachments. The re-stipulation was carried out upon the
If the usage or imports of motor vehicle which is exempt enactment of this regulation, 21 October 2019.
from the imposition of SLTGs within the period of four
years is found to be not in accordance with the original Furthermore, based on the Minister of Finance Regulation
purpose or is transferred to another party, the exempted No, 156/PMK.010/2018 (MoF Reg. No. 156/2018)
SLTGs and/or the underpaid VAT on the import or concerning the Amendments to MoF Reg. No. 146/2017,
acquisition of the vehicle must be paid. This time period the previous rates can still be utilized if the banderoles
is different from the previous regulation which was set are ordered before 1 February 2020. Table 1 indicates
at five years. the new HJE threshold and the CHT rates for domestically
produced tobacco products compared to the previous
The technical rules for motor vehicles subject to SLTGs rates. Meanwhile, Table 2 lists the same category as Table
are regulated by a Minister of Finance Regulation. At 1 for imported tobacco products.
present, the implementation of the SLTGs policy is
regulated in the Minister of Finance Regulation No. 33/
PMK.010/2017 concerning the Types of Motor Vehicles
that are Subject to Sales Tax on Luxury Goods and
Procedures for Exemption from the Imposition of Sales
Tax on Luxury Goods (MoF Reg, No. 33/2017). This