Potential Incentive for Green Product: Imposing Excise on Hybrid Car in Indonesia
Abstract
By 2012, the Government committed to provide incentive for hybrid car which able to consume 1 liter gasoline for 30 km trip. The incentive will be applied on two steps; the first step is on the import of completed built up (CBU) hybrid car and the second pace is on the assembling (manufacturing) of the hybrid car. Thus, this paper aims to study the possibility of providing incentive to hybrid car by imposing excise. The study will be mainly discussing the existing regulations on taxation on hybrid car and excise imposition in Indonesia, how the literature talks about excise, and how the incentive could be applied for hybrid car particularly. The data was collected from literature study, best practices, regulations review, focus group discussions and in-depth interview. The study found that excise has several merit to provide incentive for green product and hybrid car particularly. In order to minimize the potential extra taxation, the government may switch the Luxury Goods Tax (LGT) to excise. The incentive itself can be applied with discriminations on tariff with several purposes.Downloads
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