- The government recently tabled a plan to impose a Luxury-Goods Sales Tax (“PPnBM”) in a bid to reduce carbon emissions. However, various parties are claiming that this idea is not suitable for Low-Cost Green Cars (“LCGC”), which are set to have a 3% PPnBM rate imposed upon them.
- Commenting on this issue, tax pundit Yustinus Prastowo is recommending that the government impose a carbon excise as opposed to PPnBM for the following reasons: 1) Several countries have already implemented carbon excise and such taxes have been proven to be able to boost additional state revenue through double-dividend schemes; 2) Carbon excise can be imposed on a periodic basis so that any environmental effects can be closely monitored; and 3) Such excise schemes are easily administrated and are focused in their effects as they target carbon emissions on a grams-per-kilometer basis.
- Moreover, according to Yustinus, as PPnBM is used in order to control the consumption of luxury goods, such a tax scheme would not be suitable in terms of the stated aim of reducing carbon emissions. For example, expensive cars with low emissions will have PPnBM imposed upon them, which of course is not in line with the primary goal of emissions reduction.
- For more on this story, see: “Pengenaan Cukai Kendaraan Bermotor Lebih Tepat Ketimbang PPnBM”
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