2022 State Budget: Fiscal Policy and Structural Reform

Policy Synergy in the Property and Automotive Sector The government, together with BI and OJK, have provided a stimulus to the property and automotive sectors to encourage public consumption and at the same time improve the performance of the business sector. 2 Automotive Sector Property Sector Government B Bank Indonesia QK OJK Giving VAT Incentives on Luxury Goods Borne by the Government for Motor Vehicles through PMK No. 77 of 2021 which amend PMK No 20 of 2021 • ⚫ Car which produced with local purchases > 60%. The PPnBM Discount stimulus is given in stages: ➤ For 4x2 Type (<=1500 cc): 100% during Sep- Dec 2021 ➤ For 4x2 Type (>1500 cc, <= 2500 cc): 50% during Sep-Dec 2021 For 4x4 Type (>1500 cc, <=2500 cc): 25% during Sep-Dec 2021. ! Relaxation of down payment requirements on automotive loans/financing to minimum 0% for all new motor vehicles, while maintaining prudential principles and risk management as stipulated | by PBI No. 23/2/PBI/2021 effective I 1st Mar 2021 31st Dec 2021. I Letter of the Chief Executive of Banking Supervision and Non-Bank Financial Institutions: Relaxation of Risk Weighting Policy for Credit Risk Weighted Assets/Motor Vehicle Financing Exemption from the Maximum Credit Lending Limit to Battery- Based Electric Motor Vehicle Manufacturers Giving Government-Borne VAT Incentives Borne by the Government for the Submission of Landed Houses and Apartment Residential Units through PMK 103 of 2021 which amend PMK No. 21 of 2021 Relaxation of Loan/Financing-to-Value (LTV/FTV) ratio on housing loans/financing to maximum 100% on all residential property (landed houses, apartments and shop houses/office houses) for banks meeting specific NPL/NPF criteria, and repealing regulations on the gradual liquidation of partially prepaid property, while maintaining prudential principles and risk management, as stipulated by PBI No. 23/2/PBI/2021 effective 1st Mar 2021 31st Dec 2021. Relaxation of Risk Weighted Assets for Credit / Mortgage Funding Depends on the LTV / FTV Ratio through the Letter of the Chief Executive of Banking and IKNB Supervision. Source: Coordinating Ministry for Economic Affairs 13

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