Source: Kumparan.com | January 5, 2026

The Ministry of Industry (Kemenperin) submitted a draft incentive and stimulus plan for the automotive industry starting in 2026 to the Ministry of Finance (Kemenkeu) just before the new year.

Minister of Industry, Agus Gumiwang Kartasasmita, emphasized that the proposal aims to protect workers and the industrial ecosystem involved, thereby contributing to the national economy.

“We have submitted it, and as we have always stated, the program we are proposing is for the protection of workers and also for strengthening or strengthening the automotive manufacturing sector,” Agus said in Jakarta, as quoted by Antara.

Agus claimed that the implementation of the plan is more comprehensive and measurable than the incentive scheme during the Covid-19 pandemic. The goal is to maintain the sustainability of the workforce in the national automotive industry.

Furthermore, the Ministry of Industry has set price limits for each vehicle segment to ensure that the incentives are truly targeted. The discussions are said to involve the Association of Indonesian Automotive Industries (Gaikindo).

“The Ministry of Industry’s sole interest is to protect the automotive sector’s workforce, the automotive ecosystem. The forward and backward linkages are very strong, and the automotive sector is too large, so we must protect it,” Agus explained.

“The Ministry of Industry certainly doesn’t want our proposal to leave the country in a deficit. Therefore, the calculated benefits must outweigh the costs the state has prepared,” he concluded.

To save the national automotive market, which was impoverished by the Covid-19 pandemic, the government at that time issued an incentive in the form of periodic reductions in the Luxury Goods Sales Tax (PPnBM).

The government, through the Ministry of Finance, issued a PPnBM discount policy in 2021. At that time, the regulation was issued through Minister of Finance Regulation (PMK) No. 5 of 2021 concerning the PPnBM discount, which was then extended in 2022.

Generally, the requirements and models eligible for the PPnBM discount were very limited. Only models included in the LCGC (Low Cost Green Car) or KBH2 category with a maximum engine capacity of 1,500 cc, domestically produced, and a maximum price of IDR 250 million. However, for the new plan, Agus signaled that there would be regulatory adjustments related to vehicle technology, particularly those geared towards environmentally friendly technology, as this vehicle segment is currently experiencing increasing growth.