Gov’t Launches Incentive for Purchasing Electric Car and Bus

By Office of Assistant to Deputy Cabinet Secretary for State Documents & Translation     Date 6 April 2023
Category: News
Read: 5.044 Views

The Indonesian Government has committed to accelerate economic transformation through added value tax (PPN) incentive for purchasing electric car and bus. The incentive is provided during the tax period of April to December 2023.

“The policy is launched in order to accelerate economic transformation to attract more investments in the electric vehicles ecosystem, to provide more job opportunities, to expedite the shifting from fossil energy to electric energy. So, in the future, it is expected to speed up emission reduction and to make energy subsidy efficient,” said Head of Fiscal Policy Agency (BKF), Ministry of Finance Febrio Kacaribu as cited from the Ministry of Finance’s website, Thursday (04/06).

The policy is stated in Regulation of Minister of Finance Number 38 of 2023 on Value Added Tax on Handover of Certain Four-Wheel Battery Electric Vehicles and Certain Bus Battery Electric Vehicles Afforded by the Government Fiscal Year 2023.

The incentive is provided for:

  1. Battery-Based Four-Wheel Electric Vehicles (KBLBB) and buses using 40 percent or more domestic components (TKDN ≥ 40%), the PPN will be afforded by the Government (DTP) at 10 percent rate, and the remaining PPN will be charged at 1 percent.
  2. KBLBB using 20 percent or more TKDN and less than 40 percent (20% ≤ TKDN < 40%), the PPN will be afforded by the Government (DTP) at 5 percent, and the remaining PPN will be charged at 6 percent.

Models and types of the vehicles fulfilling the requirements of TKDB are stated in the Decision of Minister of Industry Number 1641 of 2023. Meanwhile, the criteria for TKDN value will be in line with Presidential Regulation Number 55 of 2019 on Acceleration of Battery Electric Vehicle Program for Street Transportation, and the roadmap of battery electric vehicle acceleration program run by the Ministry of Industry.

Director General of Metal, Machine, Means of Transportation, and Electronic Industries (ILMATE), Ministry of Industry, Taufiek Bawazier hopes that the incentive can increase people’s interest in buying electric vehicle.

“The program of facilitating the PPN paid by the Government for certain four-wheel KBLBB and bus, the Government hopes that it will increase people’s interest in buying electric vehicle, and to support domestic electric vehicle ecosystem. At the early stage, the target aims 35,863 units of electric vehicles and 138 units of electric bus in 2023,” Taufiek said.

On the implementation of the tax facilitation, Taufiek explained, the ministry will conduct a monitoring of TKDN value suitability. The monitoring can be carried out by independent verification agencies appointed by Directorate General of ILMATE.

During the monitoring, if the KBLBB is found not fulfilling TKDN value, then Directorate General of ILMATE shall impose an administrative sanction, which is being removed from the list of certain KBLBB that can use PPN DTP. (UN)(AW/LW)

Latest News