Build EV Factory In RI, Citroen To BYD Will Immediately Enjoy PPnBM Borne By The Government

Minister of Industry Agus Gumiwang Kartasasmita (Photo: dock. Ministry of Industry)

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said three companies are ready to build electric car factories in Indonesia. The three are BYD, AION, and Citroen.

"Reported in 2024 there are three companies that are committed to building production facilities or factories in Indonesia for automotive purposes, especially EVs (electric vehicles) namely BYD, Citroen and AION," Agus said at a press conference on the Economic Stimulus Package for Welfare at the Coordinating Ministry for the Economy Office, Jakarta, Monday, December 16.

Agus assessed that the three companies would immediately enjoy stimulus incentives in the form of 0 percent import duties to the Sales Tax on Luxury Goods borne by the government (PPnBM DTP) of 15 percent.

"The three companies will enjoy the stimulus incentives previously conveyed by the Minister of Finance (Sri Mulyani) and the Coordinating Minister for the Economy (Airlangga Hartarto) in the form of 0 percent import duty and 15 percent PPnBM DTP," he said.

He said the effort showed a signal to investors that the regulations in Indonesia were actually quite competitive. This is also in line with Indonesia's efforts to become a battery-based electric motorized vehicle (KBLBB) production hub in Southeast Asia (ASEAN).

On the same occasion, Agus also reported that the automotive sector was experiencing pressure with declining sales. This condition is due to a decrease in people's purchasing power, especially the middle class. Thus, incentives are needed to boost car sales in the country.

Previously, Coordinating Minister for Economic Affairs Airlangga Hartarto officially announced the provision of Sales Tax incentives on Government-borne Luxury Goods (PPnBM DTP) of 3 percent for hybrid cars.

"For the middle class, the government continues the DTP VAT for property and also continues the facilities for battery-based motorized vehicles or electric vehicles for the handover of four wheels based on TKDN," said Airlangga.

"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.

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.

"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.