Motor Vehicle Tax Principles and Regulations

Owning a motor vehicle means being prepared to bear the tax that must be paid every year. Whether it's a motorcycle or a car, both have a basis for taxation and have tax rates according to applicable regulations.

Have you ever wondered what the basis for tax imposition and its regulations actually are? The motor vehicle tax regulations are provisions from the local government regarding the ownership of motor vehicles. 

This is stated in Law Article 1 numbers 12 and 13 of Law Number 28 of 2009, which mentions tax on the ownership and/or control of motor vehicles. In its implementation, every individual or entity that owns a motor vehicle is subject to tax on the ownership and/or control of that motor vehicle.

The motor vehicles referred to are types of wheeled vehicles along with their trailers that are used on all types of land roads and are powered by motorized force. The subjects include personal ownership or a business entity. 

Meanwhile, the object of the Motor Vehicle Tax (PKB) includes:

1. Ownership and/or control of motor vehicles.

2. The definition of motor vehicles referred to is: 

    * Wheeled vehicles along with their trailers that are operated on land.

    * Motor vehicles operated on water with a gross tonnage (GT) of 5 (five Gross Tonnage) to GT 7 (seven Gross Tonnage).

3. Exempted vehicles:

    * Trains.

    * Motor vehicles used for national defense and security purposes.

    * Motor vehicles owned or controlled by embassies, consulates, foreign representatives based on reciprocity, and international organizations that receive tax exemption facilities from the Government.

    * Motor vehicles owned or controlled by manufacturers or importers provided for exhibition purposes and not for sale.

Meanwhile, the Tax Base (DPP) is calculated based on two main elements, namely the Selling Value of Motor Vehicles (NJKB) and the Weight that reflects the level of road damage or environmental pollution due to the use of motor vehicles. 

Then the tax base specifically for motor vehicles used outside public roads (heavy and large equipment, water vehicles) is the Selling Value of Motor Vehicles (NJKB). 

Read also: Discussion on 0 percent car tax relaxation

Types of vehicle taxes 

There are two types of Motor Vehicle Tax (PKB) that must be paid by vehicle owners. The first is the annual PKB that must be paid every year like Income Tax (PPh). 

Meanwhile, the Five-Year PKB, as the name suggests, is paid every five years. Each payment will be accompanied by the validation of the vehicle registration certificate (STNK) and a new license plate.

Motor Vehicle Tax Rates 

Regarding motor vehicle tax rates, everything is regulated by law and local regulations. Article 6 of the Law on Regional Taxes and Levies explains the determination of motor vehicle tax amounts. 

Related to the amount of vehicle tax, it is determined by the following two formulas. 

PKB = Tax Base x Tax Percentage 

PKB : NJKB x Tax Percentage 

The Selling Value of Motor Vehicles (NJKB) is determined based on the general market price of a motor vehicle or the general market price in the first week of December of the previous tax year. The price data is obtained from various accurate data sources. 

Progressive Tax Rates 

Progressive tax rates are imposed on vehicle owners who have more than one car or motorcycle. This data is viewed based on the same owner's name and address. 

The calculation of progressive tax is adjusted according to Regional Regulation Number 2 of 2015. The tax rate increases by 0.5 percent for each ownership. For example, the first vehicle is taxed at 2 percent, the second vehicle at 2.5 percent, the third at 3 percent, and so on up to a maximum imposition of 10 percent. 

Furthermore, the amount of tax that must be paid by vehicle owners every year and every five years will certainly vary according to NJKB, weight, and progressive rates. Additionally, there is a Mandatory Contribution for Road Traffic Accident Insurance (SWDKLLJ) of Rp 143 thousand for cars and Rp 35 thousand for motorcycle owners. 

By understanding the basis and regulations of vehicle taxes as mentioned above, at least you won't be confused about the basis for motor vehicle tax imposition and how much tax you have to bear.

Author: Dinno Baskoro