Progressive Tax: Definition, Rates, and How to Calculate It

In the context of discussions regarding motor vehicle tax, our thoughts often turn to annual tax and five-year tax. However, there is an element that should not be overlooked, namely progressive tax. What exactly is meant by progressive tax? To better understand its mechanism and impact, let us delve deeper into the definition of progressive tax, its legal basis, its rates, and how to calculate it.

What is Progressive Tax?

Progressive tax is a tax that must be paid if a person owns more than one motor vehicle. Progressive tax has certain provisions such as the same vehicle owner, the same type of vehicle, and the same address or family card of the vehicle owner.

However, these provisions do not apply if you only own one car and one motorcycle. Progressive tax also does not apply to motor vehicles such as those used by government agencies and state apparatus. The regulations regarding progressive tax have been stipulated in Law No. 28 of 2009 concerning Regional Taxes and Regional Levies.

Legal Basis for Progressive Tax Rates

The legal basis for the implementation of Progressive Tax Rates on Motor Vehicles in Indonesia is found in Article 6 of Law Number 28 of 2009. This article explicitly regulates the tax rates imposed on the ownership of private motor vehicles, with the following provisions:

"The Tax Rate for private motor vehicles is set as follows: a. for the ownership of the first motor vehicle, the lowest is 1% (one percent) and the highest is 2% (two percent); b. for the ownership of the second motor vehicle and beyond, the rate can be set progressively with a minimum of 2% (two percent) and a maximum of 10% (ten percent)."

With this provision, the progressive tax rate system is applied by considering the number of motor vehicles owned by the owner. Therefore, this article provides a clear legal basis for the application of higher tax rates in line with the increase in the number of motor vehicles owned by individuals. This information is sourced directly from the official website of the Directorate General of Taxes of the Ministry of Finance of the Republic of Indonesia.

Progressive Tax Rates for Cars

For those of you who only own one car, you are required to pay a tax of 1.5%. Meanwhile, for the ownership of two cars, the tax cost will increase by 0.5%, making the tax you have to pay 2%.

If you own three cars, you are required to pay progressive tax of up to 2.5%. The multiple of the tax cost depends on how many cars you own. The calculation of the progressive car tax refers to the selling value of the car as determined by the APM (Authorized Brand Agent) and the Regional Revenue Office.

In addition, factors such as the usefulness of vehicle usage and the risk of road damage also determine the amount of progressive tax.

How to Calculate the Amount of Progressive Car Tax with Examples

Here are some things you need to understand before calculating the progressive tax for motor vehicles.

Market price (APM) or NJKB (Selling Value of Motor Vehicles) as determined by the Regional Revenue Office.
Negative impact on SWDKLLJ (Mandatory Contribution for Traffic Accident Fund or damage to the road caused by vehicle use).

Before calculating the progressive tax cost, you must know the following formulas.

1. NJKB Formula

NJKB = (PKB (Motor Vehicle Tax) : 2) x 100

2. Progressive Tax Formula

Progressive tax = SWDKLLJ + PKB

To avoid confusion, consider the following example.

Example: You live in Jakarta and buy three cars in the same year. The amount of PKB for your car on the STNK is Rp. 4,000,000, and the SWDKLLJ rate for your car is Rp. 400,000. Therefore, your NJKB amount is:

NJKB =(PKB:2) x 100

NJKB =(Rp. 4,000,000 : 2) x 100 = Rp. 200,000,000

Here’s how to calculate the progressive tax cost for your car.

1. First Car

PKB = Rp. 200,000,000 x 2% = Rp. 4,000,000

SWDKLLJ = Rp. 400,000

Progressive tax = Rp. 400,000 + Rp. 4,000,000 = Rp. 4,400,000

2. Second Car

PKB= Rp. 200,000,000 x 2.5% = Rp. 5,000,000

SWDKLLJ= Rp. 400,000

Progressive Tax = Rp. 400,000 + Rp. 5,000,000 = Rp. 5,400,000

3. Third Car

PKB= Rp. 200,000,000 x 3% = Rp. 6,000,000

SWDKLLJ= Rp. 400,000

Progressive Tax = Rp. 400,000 + Rp. 6,000,000 = Rp. 6,400,000

In conclusion, you must pay a total progressive tax for all three cars amounting to Rp. 16.2 million. If you are confused, you can check the tax amount online through the local government website.

Progressive Tax Rates for Motor Vehicles in Several Regions

It is important to note that progressive rates may vary in each province. Here are examples of progressive tax rates for motor vehicles in several regions in Indonesia:

DKI Jakarta:

Ownership of the first motor vehicle = 2%
Ownership of the second motor vehicle = 2.5%
Ownership of the third motor vehicle = 3%
Ownership of the fourth motor vehicle = 3.5%
Ownership of the fifth motor vehicle = 4%
Ownership of the sixth motor vehicle = 4.5%
Ownership of the seventh motor vehicle = 5%
Ownership of the eighth motor vehicle = 5.5%
Ownership of the ninth motor vehicle = 6%
Ownership of the tenth motor vehicle = 6.5%
Ownership of the eleventh motor vehicle = 7%
Ownership of the twelfth motor vehicle = 7.5%
Ownership of the thirteenth motor vehicle = 8%
Ownership of the fourteenth motor vehicle

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