Ministry Of Finance: VAT Incentives For Cars And Electric Buses Valid Until December 2023

Head of the Fiscal Policy Agency of the Ministry of Finance (Kemenkeu) Febrio Kacaribu said the government-borne value added tax incentive (PPN DTP) for the purchase of cars and electric buses is valid from the April 2023 tax period until the December 2023 tax period.

"This policy was launched in order to accelerate economic transformation to increase the attractiveness of investment in the electric vehicle ecosystem," Febrio said in an official statement, quoted from Antara, Tuesday, April 4.

In addition, he continued, the policy was also launched to expand job opportunities and accelerate the shift from using fossil energy to electrical energy so that in the future it is hoped that it will accelerate emission reduction as well as energy subsidy efficiency.

Incentives are given through the Minister of Finance Regulation (PMK) Number 38 of 2023 concerning Value Added Tax on the Delivery of Certain Four-wheeled Battery-Based Electric Motorized Vehicles and Certain Bus Battery-Based Electric Motor Vehicles Borne by the Government for Fiscal Year 2023 (PMK PPN DTP Electric Vehicles).

The provision of VAT DTP incentives for the purchase of four-wheeled battery-based electric motorized vehicles (KBLBB) and buses is provided in two provisions.

First, four-wheeled and Bus Battery-Based Electric Motor Vehicles (KBL) with a Domestic Component Level (TKDN) equal to 40 percent, will be given a VAT DTP of 10 percent, so that the VAT that must be paid is only 1 percent. Second, the KBL Based on Bus Battery is equal to 20 percent to 40 percent given a VAT DTP of 5 percent, so that the VAT to be paid is 6 percent.

Models and types of vehicles that meet the TKDN requirements are determined by the Decree of the Minister of Industry Number 1641 of 2023. The criteria for TKDN values pay attention to the alignment with Presidential Regulation number 55 of 2019 and the roadmap for the acceleration of battery-based electric motor vehicles from the Ministry of Industry (Kemenperin).

Meanwhile, the Director General of Metal, Machinery, Transportation Equipment and Electronics (ILMATE) of the Ministry of Industry, Taufiek Bawazier, said that with the implementation of the government's VAT DTP facility program for certain four-wheeled KBLBB and certain buses, the government hopes that public interest in buying electric vehicles will increase, and support the creation of an electric vehicle ecosystem in the country.

"In the initial stage, it is estimated that 35,862 electric cars and 138 electric buses will be given in 2023," said Taufiek.

For the technical implementation of the tax facilitation, the Director General of ILMATE at the Ministry of Industry supervises the suitability of the TKDN value. This supervision can be carried out by an independent verification agency appointed by the Director General of ILMATE.

If under supervision there is a KBLBB that does not meet the TKDN value, the Director General of ILMATE can impose administrative sanctions in the form of removing from certain KBLBB lists that can take advantage of VAT DTP.