Progressive Car Tax, Let's Understand the Rules and Calculations

For those of you who own a motorized vehicle, ideally you are literate with the term progressive car tax. This tax is one type of tax imposed on car ownership, and has its own calculation method.

Basically, progressive tax can actually be interpreted as a tax rate that increases in accordance with the increase in the basis of imposition of tax. Types that include this tax are for example, Income Tax, which will be greater when the income you receive also increases.

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So what does the progressive tax on cars mean?

A progressive tax on cars is imposed on vehicle ownership, in this case cars, second and so on. For example, if you have two cars that are both in the name of your identity, then the second car will be charged a progressive car tax rate.

The same applies if the car owned is still in the name of a family member in one Family Card. The second car onwards will be subject to a progressive tax rate applicable based on Law Number 28 of 2009 concerning Regional Taxes and Regional Levies.

You must then understand the different contexts, for example you have one motorcycle and one car. Although the two vehicles are named after one person, there is no progressive tax imposed.

Subject to Local Regulations

For information, this progressive tax on cars and motorcycles is actually not applied in all regions in Indonesia. There are only a few regions that apply the tax, because vehicle tax will be included in regional revenue.

Some regions that have implemented progressive taxes include the following.

• DKI Jakarta, since 2010
• East Java, since 2011
• Central Java, since 2018
• Riau Islands, since 2019

Although it is the policy of each region, the reference to the regulations used is in Law Number 28 of 2009 concerning Regional Taxes and Regional Retribution. So don't be surprised if the second car you have has a higher tax than the first car!

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Car Progressive Tax Rate and How to Calculate It

Actually, the implementation of this progressive tax on cars and motorcycles is quite simple to know. Ownership of the first motor vehicle will be subject to a fee or tax of at least 1%, or at most 2%.

On the second, third, and so on ownership will be charged at a rate of at least 2%, and at most 10%. Each time there is an additional vehicle, the tax imposed increases by 0.5%. So for example the tax rate of the first vehicle is 2%, then the second vehicle is 2.5%, the third vehicle is 3%, and so on.

This rate continues to grow progressively until the seventeenth vehicle, with a tax rate of 10%. A little disclaimer, you have to remember that this tax is based on regional policy, so the amount may vary in each region, depending on the regulations that apply in the area.

For an illustration of how to calculate it, you can see the explanation below.

For example, you have three units of cars with the same brand. All three were bought in the same year, and you live in the DKI Jakarta area. Motor Vehicle Tax or PKB written on STNK, for example, is Rp3,000,000 and the Compulsory Contribution to the Road Traffic Accident Fund or SWDKLLJ is Rp155,000. So for the tax year that you have to pay, the method is as follows.

Selling Value of Motor Vehicle = (Rp3,000,000 / 3) x 100 = Rp100,000,000

First Car Tax

• PKB = Rp100,000,000 x 2% = Rp2,000,000
• SWDKLLJ = Rp155,000
• Progressive Tax = Rp2,000,000 + Rp155,000 = Rp2,155,000

Second Car Tax

• PKB = Rp100,000,000 x 2.5% = Rp2,500,000
• SWDKLLJ = Rp155,000
• Progressive Tax = Rp2,500,000 + Rp155,000 = Rp2,655,000

Third Car Tax

• PKB = Rp100,000,000 x 3% = Rp3,000,000
• SWDKLLJ = Rp155,000
• Progressive Tax = Rp3,000,000 + Rp155,000 = Rp3,155,000

That was an illustration that hopefully can be an illustration to understand how progressive taxes on cars and motorcycles are applied. Of course, in practice, there may be other variables that you need to pay attention to so as not to miss the tax liability you have on motor vehicle ownership.

A Little Extra, Recognize the Difference with Proportional Tax

Now after understanding what is meant by the progressive tax on cars and motorcycles above, you should also know about what is called proportional tax. This tax has a different calculation from progressive tax, because the amount is applied equally to each taxpayer.

What does it mean?

No additional tax is imposed because this tax is not affected by changes in the value of the tax object owned by a person. This tax rate applies equally to every taxpayer in Indonesia, and the aim is to create equality between the average tax rates paid.

Some types of taxes that fall into this group include the following.

• Gross Receipt Tax
• Taxes per Capita
• Value Added Tax

And several other types of taxes are imposed equally for each taxpayer and existing tax object regardless of the amount of the value of the tax object concerned.

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Being an obedient taxpayer paying his taxes is ideal for modern society. Of course, your favorite car also deserves optimal care and protection, because it has carried out its duties to take you and your family on every trip made.

After understanding more about progressive car taxes, now is the time for you to also provide protection to it. With the right insurance, all forms of risk can be faced with better preparedness, and you can avoid losses that arise if this risk occurs. Car and Vehicle Insurance  (SmartDrive) from AXA Insurance Indonesia is the right answer to the needs of this vehicle insurance. A series of benefits can be obtained, and many conveniences can be felt when there is  a risk situation listed in the policy provisions. Contact our customer service immediately, and get reliable insurance from AXA Insurance Indonesia right now!

 
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Reference:

• https://www.online-pajak.com/tentang-pajak/pajak-progresif
• https://www.suzuki.co.id/tips-trik/ayo-mengenal-apa-itu-pajak-progresif-kendaraan-bermotor?pages=all
• https://auto2000.co.id/berita-dan-tips/tarif-pajak-progresif#
• https://www.pajakku.com/read/60ffacae8f25dc113f232819/-Tarif-Pajak-Proporsional-dan-Pajak-Progresif:-Kenali-Perbedaannya