To support the Government’s policy to accelerate the reduction of exhaust gas emissions sourced from motor vehicles and to encourage the use of energy-efficient and environmentally friendly motor vehicles, the MoF has issued a new regulation No. 141/PMK.010/2021 dated 7 October 2021 concerning the Determination of Motor Vehicles that are subject to LGST and Procedures for imposition and granting as well as administration of LGST exemption and refund (“PMK-141/2021”). PMK-141/2021 is effective from 16 October 2021.

PMK-141/2021 is also issued to revoke the previous regulations on LGST, comprising:

1. MoF regulation No. 64/PMK.011/2014 as most recently amended by MoF regulation No. 33/PMK.011/2017 regarding Types of Motor Vehicles Subject to Luxury Goods Sales Tax and Procedures for Granting Exemption of Luxury Goods Sales Tax;
2. Director General of Tax (DGT) Decision No. KEP-199/PJ./2000 regarding the reporting and collection of VAT and LGST on delivery of Motor Vehicles;
3. DGT Decision No. KEP-540/PJ./2000 regarding the Imposition of VAT and LGST on Motor Vehicles;
4. Article 12 point 3 of DGT Decision No. KEP-214/PJ./2001 regarding the description and/or other documents that must be attached to the tax return; and
5. DGT Decision No. KEP-229/PJ./2003 regarding the procedure for granting and administration of LGST exemption and refund.

The major change in the new regulation is the tax imposition bases of the LGST rates. Previously, the basis for determination of the LGST rate was only engine cylinder capacity. The new regulation stipulates that the LGST rate shall be based on several criteria, i.e.:

1. Engine cylinder capacity;
2. Fuel consumption; and
3. Carbon (CO2) emission level.

A summary of the LGST rates imposed is as follows:

Please find the summary tables on the next page