Retail in Asia

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New tax law threatens sales, car sellers say

The newly passed law authorizing city and regional administrations to set vehicle tax rates on a progressive basis will cause car sales to drop in 2010, representatives of Daihatsu and Isuzu, both grouped under Astra International, said over the weekend.

In August, lawmakers passed a new law on regional taxes and levies setting new vehicle tax regulations, stating that car owners have to pay more tax for each additional private motor vehicle owned.

The maximum tax rate for a single owner is 10 percent.

Yohannus Nangoi, vice president of Isuzu’s sole distributor in Indonesia, PT Isuzu Astra Motor Indonesia, said the law might hamper Isuzu’s high expectations for 2010 car sales.