LCGC Expected To Boosts Indonesia Exports

Jakarta, June 10 (Antara) - The production of the Low Cost Green Car (LCGC) is expected to boost Indonesia`s automotive exports, according to the Ministry of Industry. "Besides for domestic use, the low cost green car is also intended for exports, and is expected to increase the value of our automotive product exports," said a spokesperson from the Ministry of Industry Budi Darmadi, in a press conference here Monday. Budi said that currently car exports are still in the range of 12 to 13 percent, and with the low cost green car production it is expected to increase exports up to 20 percent of the national production. "High technology should be involved if we are targeting to seek for foreign exchange, because high technology is commonly used overseas," said Budi. Furthermore, the issuance of Government Regulation No. 41 of 2013, is expected not only to push national car production, but also to increase the number of component industry. "Besides, LCGC is also prepared to meet domestic demand and avoid the influx of imported cars, because ASEAN countries such as Malaysia and Thailand have also produced similar vehicles," said Budi. Budi explained that the growing Indonesian economy also boosted demand for motor vehicles, especially cars and if the demand is not supplied domestically, then Indonesia would be flooded with imported products. "Empoyment generated from this industry is also not small, with the inclusion of approximately 10 cars and 100 component industries, investment will add a workforce of about 30,000 people," said Budi. On Wednesday, June 5, the government has issued a regulation regarding the Low Cost and Green Car. "All is set and signed by the President on May 23, 2013. The important thing now is that LCGC can be produced legally," said Industry Minister MS Hidayat here on Tuesday. Minister Hidayat said that the regulation contained in the Government Regulation Number 41 of 2013 on the taxable goods categorized as a luxury form of Motor Vehicles Subject to Sales Tax on Luxury Goods. Article 3 paragraph 1 (c) Regulation No. 41 of 2013 mentioned that for energy-efficient cars and affordable prices, Sales Tax on Luxury Goods on taxable goods should be set at 0 percent of the selling price. The zero percent tax is applicable for spark-ignited motor fuel with a cylinder capacity of 1,200 cc and a fuel consumption of at least 20 kilometers per liter or equivalent. It is also applicable for a compression ignited engine (diesel or semi-diesel) of a cylinder capacity up to 1,500 cc and fuel consumption of at least 20 kilometers per liter or equivalent fuel.