Officially, The Government Gives 3 Percent Incentives For Hybrid Cars

Press Conference on VAT 12 Percent (Photo: Theresia Agatha/VOI)

JAKARTA - The government has set incentive packages for several important sectors as an effort to maintain purchasing power after the Value Added Tax (VAT) is implemented at 12 percent starting January 1, 2025.

Coordinating Minister for Economic Affairs Airlangga Hartarto said one of the incentives for the package was targeting environmentally friendly vehicles with hybrid technology or hybrid electric vehicles (HEV).

"For the middle class, the government will resume VAT DTP for property and also resume facilities for battery-based motorized vehicles or electric vehicles for the handover of four wheels based on TKDN," Airlangga said at a press conference on the Economic Stimulus Package for Welfare at the Coordinating Ministry for the Economy Office, Jakarta, Monday, December 16.

"Then related to the latest one is PPnBM DTP for hybrid motorized vehicles. Now, VAT for hybrid is the government provides a discount of 3 percent," he continued.

If the incentives referred to are officially enforced, hybrid cars will only be charged with a maximum tariff of PPnBM of 9 percent (previously 6-12 percent).

In addition, Airlangga added, that the PPnBM policy and import duties for fully imported electric cars (completely built up/CBU) and decomposed (completely knock down/CKD) are still valid.

This step is expected to accelerate the adoption of electric and hybrid vehicles in Indonesia and support the carbon emission reduction target.

"Well, in accordance with the ongoing program, this is also an exemption from CBU EV import duties for certain wheels in full or CBU and certain four-wheeled CKD," he said.

This policy is also considered as a strategic step to accelerate the green energy transition in the transportation sector as well as provide wider access to the public for low-emission vehicles.