Coordinating Ministry For Maritime Affairs Calls Policy Packages To Increase EV Investment Releases In November 2023

JAKARTA - The Coordinating Ministry for Maritime Affairs and Investment (Kemenko Marves) stated that the policy package to increase investment interest in global electric vehicle (EV) manufacturers to Indonesia is expected to be completed and released in November.Deputy for Infrastructure and Transportation Coordination of the Coordinating Ministry for Maritime Affairs Rachmat Kaimuddin said the government was drafting a scheme to invite investors from any country to invest in building the EV industry with financial incentive support within a certain period of time.

"Hopefully this month the regulations can be issued," said ANTARA, Friday, November 10.

Rachmat explained that the fiscal incentive in question is, for example, in the form of relief from import duties for vehicles.

However, to get these incentives, producers who are committed to building factories in the country must also produce the same quantity as those they import.

"So if for example he imports how many (units), one particular amount, he must also produce up to 2027 the same amount (as imported). So the production ratio is one to one," he explained.

According to Rachmat, the scheme was quite successful in implementing it in Thailand.

Sales of electric vehicles in the land of white elephants have now continued to increase to around 8 percent from the previous year which was only 2 percent.

By inviting more investors to produce electric vehicles in their country, people will get more options to be able to switch to these environmentally friendly vehicles.

"Because there are many choices. So once it is implemented, there are a lot of new cars that appear. If we (in Indonesia) the choice is still relatively limited, there are only two types, one is Rp. 200 million and the other is Rp. 700 million. So it's not complete," he said.

Although he did not mention a specific brand, Rachmat said that almost all investors who intend to build an EV ecosystem in Indonesia are eagerly awaiting the regulation. However, the government admits that it is still negotiating with a number of global EV manufacturers, including BYD to Tesla.

"I think everyone who wants to build (EV) is waiting (this rule)," he said.

Previously, Presidential Chief of Staff (KSP) Moeldoko said the government was preparing a policy package, including the duration of incentives for exemption from Income Tax (PPh) to increase investment interest in global electric vehicle (EV) manufacturers to Indonesia.

The government is reviewing to increase the "tax holiday" exemption period for electric vehicle manufacturers.

In the Minister of Finance Regulation (PMK) Number 150/2018, the PPh exemption period for electric car manufacturers is set in accordance with the investment value.

Moeldoko explained that another incentive that was being finalized was the provision of investment guarantees.

The government is reviewing not to involve cash as collateral, but assets remain immovable, such as land. KSP also stated that Presidential Regulation Number 55 of 2019 concerning the Acceleration of the Battery-Based Electric Motor Vehicle Program (KBLBB) will soon be revised to increase investment in electric vehicles in Indonesia.