Assessing the Effectiveness of Tax Reduction Policies in Rejuvenating Indonesian Automotive Industry Productivity Post-COVID-19


Abdusy Syakur Amin(1*)

(1) Teknik Industri, Universitas Pasundan, Indonesia
(*) Corresponding Author

Abstract


This study examines the governmental strategy implemented by the Indonesian Government to mitigate the repercussions of the COVID-19 pandemic on the Indonesian automotive industry. The government introduced a policy involving tax incentives, particularly targeting domestic manufacturers producing automobiles. The primary objective of this policy was to sustain industry operations, albeit within limited capacities, amidst the challenging circumstances posed by the pandemic. The provision of these incentives was formalized through the issuance of PMK No 20/PMK.010/21, addressing Sales Tax on Luxury Goods for the Delivery of Taxable Goods Classified as Luxury, specifically pertaining to certain motorized vehicles, sponsored by the government during the fiscal year 2021. This study analyzes a comparative analysis utilizing the T-test methodology on car sales data prior to and subsequent to the implementation of the tax incentive policy. The data processing was executed through the Statistical Package for the Social Sciences (SPSS). The results of the incentive application analysis reveal a notable disparity in sales figures before and after the policy's enforcement. Thus, it is concluded that the tax incentives implemented by the government are effective in increasing car sales during the COVID-19 pandemic. Consequently, the government's policy measures not only yield advantages for entrepreneurs engaged in manufacturing but also extend benefits to the broader public as consumers. This underscores the practical impact of the policy, aligning with the realities observed in society thus far.


Keywords


Automotive Industry; COVID-19; Government Intervention; Policy; Productivity

Full Text:

PDF

References


Beresteanu, A., & Li, S. (2011). Gasoline Prices, Government Support, And The Demand For Hybrid Vehicles In The United States*. International Economic Review, 52(1), 161–182. https://doi.org/10.1111/j.1468-2354.2010.00623.x

Bjerkan, K. Y., Nørbech, T. E., & Nordtømme, M. E. (2016). Incentives for promoting Battery Electric Vehicle (BEV) adoption in Norway. Transportation Research Part D: Transport and Environment, 43, 169–180. https://doi.org/10.1016/j.trd.2015.12.002

Brand, C., Anable, J., & Tran, M. (2013). Accelerating the transformation to a low carbon passenger transport system: The role of car purchase taxes, feebates, road taxes and scrappage incentives in the UK. Transportation Research Part A: Policy and Practice, 49, 132–148. https://doi.org/10.1016/j.tra.2013.01.010

Caulfield, B., Farrell, S., & McMahon, B. (2010). Examining individuals preferences for hybrid electric and alternatively fuelled vehicles. Transport Policy, 17(6), 381–387. https://doi.org/10.1016/j.tranpol.2010.04.005

Chandra, A., Gulati, S., & Kandlikar, M. (2010). Green drivers or free riders? An analysis of tax rebates for hybrid vehicles. Journal of Environmental Economics and Management, 60(2), 78–93. https://doi.org/10.1016/j.jeem.2010.04.003

Christopher W. Craighead, David J. Ketchen Jr., J. L. D. (2020). Pandemics and Supply Chain Management Research: Toward a Theoretical Toolbox. Decision Sciences, 5(4).

Gaikindo. (2023). Indonesian Automobile Industry Data.

Gass, V., Schmidt, J., & Schmid, E. (2014). Analysis of alternative policy instruments to promote electric vehicles in Austria. Renewable Energy, 61(2014), 96–101. https://doi.org/10.1016/j.renene.2012.08.012

Hardman, S. (2019). Understanding the impact of reoccurring and non-financial incentives on plug-in electric vehicle adoption – A review. Transportation Research Part A: Policy and Practice, 119(May 2017), 1–14. https://doi.org/10.1016/j.tra.2018.11.002

Hensley, R., Maurer, I., & Padhi, A. (2021, July). How the automotive industry is accelerating out of the turn. Mc Kinsey & Company.

Irawan, M. Z., Belgiawan, P. F., Widyaparaga, A., Deendarlianto, Budiman, A., Muthohar, I., & Sopha, B. M. (2018). A market share analysis for hybrid cars in Indonesia. Case Studies on Transport Policy, 6(3), 336–341. https://doi.org/10.1016/j.cstp.2017.09.003

Jenn, A., Azevedo, I. L., & Ferreira, P. (2013). The impact of federal incentives on the adoption of hybrid electric vehicles in the United States. Energy Economics, 40, 936–942. https://doi.org/10.1016/j.eneco.2013.07.025

Jensen, A. F., Cherchi, E., & de Dios Ortúzar, J. (2014). A long panel survey to elicit variation in preferences and attitudes in the choice of electric vehicles. Transportation, 41(5), 973–993. https://doi.org/10.1007/s11116-014-9517-6

Kannegiesser, M., & Günther, H. (2014). Kannegiesser, M., & Günther, H. (2014). Sustainable development of global supply chains—part 1: sustainability optimization framework. Flexible Services and Manufacturing Journal, 26, 24-47. Flexible Services and Manufacturing Journal, 26, 24–47.

Kemenperin. (2019, February). Industri Otomotif Jadi Sektor Andalan Ekonomi Nasional. Kementerian Perindustrian RI.

Klein, C., Høj, J., & Machlica, G. (2021). The impacts of the COVID-19 crisis on the automotive sector in Central and Eastern European Countries. OECD Economics Department Working Papers, 1658, 1–18.

Kufelová, I., & Raková, M. (2020). Impact of the COVID-19 pandemic on the automotive industry in Slovakia and selected countries. SHS Web of Conferences, 83, 01040. https://doi.org/10.1051/shsconf/20208301040

Kwon, Y., Son, S., & Jang, K. (2018). Evaluation of incentive policies for electric vehicles: An experimental study on Jeju Island. Transportation Research Part A: Policy and Practice, 116(September 2017), 404–412. https://doi.org/10.1016/j.tra.2018.06.015

Langbroek, J. H. M., Franklin, J. P., & Susilo, Y. O. (2016). The effect of policy incentives on electric vehicle adoption. Energy Policy, 94, 94–103. https://doi.org/10.1016/j.enpol.2016.03.050

Lathif, N., Dp, S. H., & Bon, A. T. (2021). Regulation Of Sales Tax Relaxation on Luxury Goods (PPnBM) Based on Regulation of The Minister of Finance Number 20/PMK.010/2021. Proceedings of the Second Asia Pacific International Conference on Industrial Engineering and Operations Management, 2021(20), 10–17.

Lie, H. (2022, February). Riding the momentum of automotive industry recovery. The Jakarta Post.

Ma, J., & Mayburov, I. (2021). Using DID Model to Analyse the Impact of Vehicle Purchase Tax on the Sales of Alternative Fuel Vehicle. IOP Conference Series: Earth and Environmental Science, 849(1). https://doi.org/10.1088/1755-1315/849/1/012006

Madani, D. H., & Mas-guix, N. (2011). The Impact of Export Tax Incentives on Export Performance Evidence from the Automotive Sector in South Africa. The World Bank, Africa Region, Poverty Reduction and Economic Management, Policy Research Working Paper 5585, March.

Nanaki, E. A., & Koroneos, C. J. (2016). Climate change mitigation and deployment of electric vehicles in urban areas. Renewable Energy, 99(2016), 1153–1160. https://doi.org/10.1016/j.renene.2016.08.006

O’Neill, E., Moore, D., Kelleher, L., & Brereton, F. (2019). Barriers to electric vehicle uptake in Ireland: Perspectives of car-dealers and policy-makers. Case Studies on Transport Policy, 7(1), 118–127. https://doi.org/10.1016/j.cstp.2018.12.005

Purwanto, A., Fahlevi, M., Zuniawan, A., Dimas, R., Kusuma, P., Supriatna, H., & Maryani, E. (2020). Journal of Critical Reviews the COVID-19 Pandemic Impact on Industries Performance: an Explorative Study of Indonesian Companies. Journal of Critical Reviews, 7(15), 6724–6748.

Sun, C., Zhan, Y., & Du, G. (2020). Can value-added tax incentives of new energy industry increase firm’s profitability? Evidence from financial data of China’s listed companies. Energy Economics, 86, 104654. https://doi.org/10.1016/j.eneco.2019.104654

Suwardi, W. P., Kusuma, T. C., & Kartiko, B. M. (2021). Porter’s Five Generic Strategies: A Case Study from Indonesia Automotive Industry Against COVID-19. Proceedings of the International Conference on Industrial Engineering and Operations Management, 831–841.

Thukral, S., Kovac, S., & Paturu, M. (2023). Chapter 29 - t-test. Translational Interventional Radiology Handbook for Designing and Conducting Clinical, 139–143. https://doi.org/https://doi.org/10.1016/B978-0-12-823026-8.00104-8

Urrutia-Mosquera, J., & Fábrega, J. (2021). Impact of fiscal incentives in the consumption of low emission vehicles. Case Studies on Transport Policy, 9(3), 1151–1159. https://doi.org/10.1016/j.cstp.2021.06.003

Wang, S., Li, J., & Zhao, D. (2017). The impact of policy measures on consumer intention to adopt electric vehicles: Evidence from China. Transportation Research Part A: Policy and Practice, 105(February), 14–26. https://doi.org/10.1016/j.tra.2017.08.013

Wee, S., Coffman, M., & La Croix, S. (2018). Do electric vehicle incentives matter? Evidence from the 50 U.S. states. Research Policy, 47(9), 1601–1610. https://doi.org/10.1016/j.respol.2018.05.003

Yeo, V. C. S., Goh, S. K., & Rezaei, S. (2017). Consumer experiences, attitude and behavioral intention toward online food delivery (OFD) services. Journal of Retailing and Consumer Services, 35(July 2016), 150–162. https://doi.org/10.1016/j.jretconser.2016.12.013




DOI: https://doi.org/10.15575/ks.v5i4.33579

Refbacks

  • There are currently no refbacks.


Copyright (c) 2023 Abdusy Syakur Amin

Creative Commons License
This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.


UIN Sunan Gunung Djati

Kota Bandung, Jawa Barat
Handphone: +6285961137790

E-mail: KSosial@uinsgd.ac.id

Lisensi Creative Commons

Khazanah Sosial  are licensed under Attribution-ShareAlike 4.0 International


Click Her For See Stats