JAKARTA: Automotive business players predicted the automotive sectors could be hampered although it has received income tax allowance.
Association of Indonesian Automotive Industries (Gaikindo) Chairman I Jongkie Sugiarto said the global automotive principals will likely to consider their market condition instead of income tax allowance.
“It won’t be developed unless the market also developed, the most important factor is the market,” Jongkie told Bisnis, Wednesday, May 2, 2012.
According to him the government imposed a regulation contradictory to automotive sector investment.
He continued the government provided tax allowance policy but on the other hand government, based on finance ministry regulation, lifted the minimum automotive down payment.
He commented that increasing the down payment limit could restrain the demand and lead to hamper market development to 40%.
According to government regulation No. 62/2008 related to income tax easing, four wheeled vehicle industry and metal processing equipments industry received tax allowance incentive by 30% for 6 years.
However, in amendment No.52/2012 government removed the attached detail receiving the incentive mentioning the land conveyances used by automotive industry.
Investment Coordinating Body (BKPM) Planning Deputy Tamba Hutapea confirmed the plan to revise tax allowance regulation by adding automotive industry as incentive recipient.
According to Tamba the revision mechanism was still being reviewed. Firstly, the draft was proposed to Ministry of Industry and Coordinating Ministry of Economy. (T07/msw)
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