The Ministry of Home Affairs has established a new regulation that serves as the reference for the tax base (Dasar Pengenaan Pajak/DPP) calculation of motor vehicle tax (Pajak Kendaraan Bermotor/PKB) and transfer of motor vehicle title fee (Bea Balik Nama Kendaraan Bermotor/BBNKB) for the 2021 tax year.
Serving as the reference for the calculation of DPP PKB and BBNKB, this regulation has been released as a follow-up to the provisions under Article 5 paragraph (9) and Article 11 of Law No. 28 of 2009 concerning Regional Taxes and Retribution, which mandates the calculation of DPP PKB and BBNKB stipulated under the Minister of Home Affairs Regulation (Permendagri).
Permendagri on the calculation of DPP PKB and BBNKB will be subject to annual reviews. The latest regulation is outlined in the Minister of Home Affairs Regulation No. 1 of 2021 concerning the Calculation of the 2021 Motor Vehicle Tax Base and Transfer of Motor Vehicle Title Fees (Permendagri 1/2021). This regulation was promulgated and has come into effect as of 12 January 2021.
Permendagri 1/2021 outlines the provisions and amount of DPP PKB and BBNKB which consist of two elements, namely: (i) Sales Value of Motor Vehicle (Nilai Jual Kendaraan Bermotor/NJKB); and (ii) weight that relatively reflects the level of road damage and/or environmental pollution resulting from motor vehicle use. Details of the provisions and the amount of NJKB are listed in the Appendix of Permendagri 1/2021.
Weight, on the other hand, reflects the level of damage and is stated in a coefficient whose value is in the range of 1 to 1.3. The coefficient is stipulated based on the tolerance limit value for road damage and/or environmental pollution due to the use of motor vehicles.
Juxtaposed with the former regulation, the coefficients that reflect the weight of the damage remain the same. Details of the weight of the damage are also listed in the Appendix of Permendagri 1/2021. In summary, the coefficients that reflect the weight of the damage include:
three-wheeled cars, two-wheeled motorbikes, wheeled motorbikes, and three-wheeled passenger motorbikes, and goods three-wheeled motorbikes – the coefficient value is equal to 1;
sedans – the coefficient value is equal to 1.025;
jeeps and minibuses – the coefficient value equal to 1.050;
blind vans, pick-up trucks, and microbuses – the coefficient value is 1.085;
buses – the coefficient value is equal to 1.1; and
light trucks, trucks, and the like – the coefficient value is 1.3.
In addition to outlining NJKB and weight as the calculation basis of PKB and BBNKB, Permendagri 1/2021 also amends the provisions on the imposition of PKB and BBNKB for Battery-Based Electric Motor Vehicles (Kendaraan Bermotor Listrik/KBL).
Currently, PKB and BBNKB on Battery-Based KBL for both passengers/goods and public transportation of passengers/goods are set at a maximum of 10% of DPP PKB or BBNKB. The percentage of PKB and BBNKB imposition on battery-based KBL is lower than the stipulation in the previous year's regulation, i.e. a maximum of 30% of the DPP PKB and BBNKB.
The provisions on DPP limitation render a lower burden of PKB and BBNKB on Battery-Based KBL. The policy on the imposition of PKB and BBNKB on Battery-Based KBL constitutes an incentive provided by the governor.
Other than battery-based KBL, the incentive is also provided for ambulances, fire engines, and cleaning services belonging to the central government, the Indonesian National Army (Tentara Nasional Indonesia/TNI), the Indonesian National Police, and local governments. PKB and BBNKB on said vehicle class are imposed at 0% of the DPP PKB or BBNKB.
However, the requirements to obtain these incentives must take into account the level of economic growth, conditions of the Covid-19 pandemic, regional minimum wages, and/or other factors that may hinder investments. Provisions on the requirements to obtain PKB and BBNKB incentives are regulated by a governor regulation.
Another different aspect under Permendagri 1/2021 compared to the former regulation is that heavy equipment has been eliminated from PKB and BBNKB objects. This elimination is related to the Constitutional Court Decision No. 15/PUU-XV/2017 concerning the judicial review of Article 1 point 13, Article 5 paragraph (2), Article 6 paragraph (4), and Article 12 paragraph (2) of the Regional Taxes and Retribution Law. Based on this decision, heavy equipment is no longer classified as motor vehicles.