Starting in 2025, vehicle taxes will increase as the Indonesian government introduces an additional vehicle opsen tax, a policy regulated under Law No. 1 of 2022 on Financial Relations between the Central Government and Regional Governments (HKPD). The opsen tax is an additional levy on top of the motor vehicle tax (PKB), aimed at increasing regional income and distributing tax revenue more evenly between provincial and regency/city governments. With this policy, regency and city governments will receive additional revenue from vehicle taxes, which were previously enjoyed solely by provincial governments.
Vehicle taxes increase, What is the Opsen Tax?
The vehicle opsen tax is set at 66% of the owed tax amount. The rate is calculated based on the PKB applicable in each region.
For example, let us calculate the basic tax rate for a car with a Motor Vehicle Sale Value (NJKP) of IDR 200 million. The vehicle is the first ownership under the taxpayer, and the PKB rate for first ownership, as stipulated in the provincial Regional Revenue and Expenditure Regulation (Perda PDRB), is 1.1%.
PKB owed = 1.1% x IDR 200 million = IDR 2.2 million, which goes to the Provincial Regional Treasury Account (RKUD).
Opsen PKB = 66% x IDR 2.2 million = IDR 1.450 million, which will go to the Regency or City Regional Treasury Account (RKUD), based on the taxpayer's address or National Identification Number (NIK).
When combined, the total tax administration paid by the taxpayer is IDR 2.2 million + IDR 1.450 million = IDR 3.650 million. This amount is equivalent to a rate of 1.8%, as stipulated in Law No. 28 of 2009, which applied previously.
The payment of IDR 3.650 million will be made in one go at SAMSAT (Indonesia's motor vehicle registration office), and the payment institution will split the funds between the Provincial and Regency/City RKUD. Overall, this mechanism does not increase the tax administration burden on taxpayers.
Impact on Motorcycle and Car Rental Businesses
For businesses such as motorcycle and car rentals, this policy will have significant operational implications, even though, in theory, the total tax burden remains unchanged. Here are some key points to consider:
Increase in Operational Costs, Rental businesses typically register dozens or even hundreds of vehicles under the company name. Adjustments to the tax distribution may result in changes to administrative processes, such as tax payments at the regency/city level. Furthermore, if regional governments raise PKB rates, operational costs could increase accordingly.
Adjustments to Rental Rates, To cover rising operational costs, business owners may need to increase vehicle rental rates. However, this must be done cautiously to maintain competitiveness, especially in tourist areas like Bali, where customers often seek affordable rental rates.
Impact on Consumer Purchasing Power, Higher rental prices due to tax policy changes may affect consumer demand. Budget-conscious tourists may seek alternative transportation options, potentially impacting rental business revenues.
Alternative Efficiency Strategies, Business owners may consider reducing their fleet size or switching to smaller-engine vehicles, which typically have lower tax rates. This move aims to optimize operational costs, though it might reduce flexibility in meeting customer demands.
Tips for Adapting to the New Policy
If you are running a vehicle rental business, here are some strategic steps to consider in order to minimize the impact of this policy:
Evaluate Rental Rates: Carefully calculate how much adjustment is needed to remain competitive without harming your business.
Optimize Your Fleet: Focus on vehicles that are in high demand or provide the best return on investment.
Collaborate with Local Governments: Participate in regional policy discussions to voice concerns about industry impacts.
Educate Consumers: Be transparent about why rental rates have increased, which can help build customer trust.
The addition of the vehicle opsen tax is a policy that rental vehicle businesses must anticipate. Although the total tax paid does not increase, changes in the tax distribution mechanism may affect administrative processes and operational costs. With careful planning and the right strategies, rental businesses can continue to thrive amidst these policy changes.
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