PPnBM For Electric Cars 0 Percent, Sri Mulyani: The Requirement Is To Invest IDR 5 Trillion

JAKARTA - Minister of Finance (Menkeu) Sri Mulyani said the government will provide a sales tax incentive on cheap goods (PPnBM) of 0 percent for electric vehicle manufacturers investing in Indonesia.

"This treatment will be given to manufacturers of full Battery Electric Vehicles (BEV) types," he said during a Consultation Meeting with Commission XI of the DPR, Monday, March 15.

Minister of Finance Sri Mulyani added that this policy requires two years after the realization of a significant investment of IDR 5 trillion in the BEV car industry.

Not only that, he also said that the tax exemption option could be accepted by producers more quickly as long as it was producing commercially with an investment of IDR 5 trillion.

"So they don't just say they will invest, but actually make the investment come true, and the value we use is a threshold of IDR 5 trillion," he said.

This strategy is part of the second scheme prepared by the government regarding the change in PPnBM rates in PP Number 73 of 2019 which is currently being discussed with the DPR.

Later, electric cars will be the only vehicle-type tax object that is exempt from levying luxury goods. Meanwhile, other types of vehicles, both hybrid and conventional, will be subject to a tax of 8 percent to 14 percent.

Meanwhile, the scheme I proffered by the government through the Minister of Finance to the parliament still provides PPnBM privileges for 0 percent electric cars, but for other types it is subject to a tax of 5-12 percent.

This step was called by Sri Mulyani after the government received input from investors for BEV vehicles who stated that there was no difference with hybrid-type automotive manufacturers.

In fact, they considered that the technology carried was much higher and that the vehicles in the future would indeed point to a full battery electric vehicle system and not a hybrid.

To note, in the existing Government Regulation Number 73 of 2019, it is stated that BEV and Plug-In Hybrid Vehicle (PHEV) producers both get 0 percent PPnBM relief.

"They (BEV investors) said, then why stick with a hybrid, even though we are aiming for a full battery. So that investors expect a disparity or difference, between the BEV and the plug-in hybrid, "he explained.