JAKARTA - Minister of Home Affairs Muhammad Tito Karnavian encourages all governors in Indonesia to provide fiscal incentives in the form of tax exemptions for electric vehicle owners.
The directive is contained in Circular Letter (SE) Number 900.1.13.1/3764/SJ regarding the provision of fiscal incentives in the form of Motor Vehicle Tax Exemption and Motor Vehicle Re-naming Motor Vehicle Battery-Based Electric Vehicles.
"The provision of incentives for the exemption or reduction of regional taxes in the form of PKВ and BBNKB KBL Battery-Based, including on motor vehicles that are converted from fossil fuels to Battery-Based KBL," wrote the Minister of Home Affairs in the SE which was signed on Wednesday (22/4).
This step was taken as a follow-up to Presidential Regulation (Perpres) Number 79 of 2023 concerning Changes to Presidential Regulation Number 55 of 2019 concerning Acceleration of the Battery-Based Electric Motor Vehicle Program (Battery Electric Vehicle) for Road Transport, as well as a follow-up to the Minister of Home Affairs Regulation (Permendagri) Number 11 of 2026.
This policy aims to increase energy efficiency, energy security, energy conservation in the transportation sector, as well as to realize clean energy and maintain environmentally friendly air quality.
This instruction was also issued considering the global economic dynamics which caused instability in the availability and price of energy (oil and gas), thus impacting the domestic economic conditions.
The incentive in the form of exemption or reduction of local taxes includes Motor Vehicle Tax (PKB) and Motor Vehicle Re-naming Tax (BBNKB).
The provision of incentives for vehicles of 2026 and before 2026 has been regulated in Article 19 of the Minister of Home Affairs Decree Number 11 of 2026.
In its implementation, the governor is also required to report the provision of fiscal incentives by attaching the Governor's Decree to the Ministry of Home Affairs through the Directorate General of Regional Financial Development by no later than May 31, 2026.
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