The Government Gives Two Incentives For Electric Cars To Accelerate Electrification In The Country, Anything?

Illustration (Photo: Doc. Presidential Secretariat)

YOGYAKARTA The government provides incentives for electric cars to encourage the penetration of electric vehicles in the country.

Fiscal incentives for electric motorized vehicles need to be given so that the price of electric cars can be reached by the public. In addition, providing incentives can also accelerate the process of transitioning fossil fuel cars to battery-based electric cars or battery electric vehicles (BEVs).

Quoted from the official website of the Ministry of Industry, the government's alignment with the BEV will accelerate the use of electric cars and at the same time strengthen national battery factories, create new ecosystems and businesses from upstream to downstream, from mining and smelters to assembly of electric cars and battery recycling businesses.

To support the acceleration of electrification in Indonesia, the government provides two types of electric car incentives. Anything?

Here are two types of electric car incentives provided by the government:

Quoted by VOI from the official website of the Ministry of Finance, the Central Government has issued a number of incentives to encourage the use of Battery-Based Electric Motor Vehicles (KBLBB). For direct consumers, the provision of incentives includes zero percent PPnBM, a maximum of 10% regional tax, a minimum down payment of zero percent, and low interest rates.

In addition to providing incentives to consumers, the government also provides stimulation to the manufacturing industry to accelerate the electrification process in Indonesia.

The manufacturing industry will be given tax holidays, tax allowances, and super tax deductions for research and development.

In order to increase this support, the government has set a zero percent entry fee for imported electric motorized vehicles in incomplete and incomplete condition (incompletely knocked down/IKD).

The policy is stated in the Regulation of the Minister of Finance Number PMK-13/MK.010/2022 concerning the Fourth Amendment to the Regulation of the Minister of Finance Number 6/PMK.010/2017 concerning the Determination of the Goods Classification System and the Feasibility of Import Duty on Import goods set on February 22, 2022.

Of the various types of goods imported from abroad, such as imports in complete but not yet assembled (Completely Knocked Down/CKD) and imports in complete and complete condition (Completely Built-Up/CBU), this PMK targets IKD because this type can provide greater benefits for the national economy. Moreover, the incomplete components of KBLBB/BEV IKD can be met using the components produced by domestic producers.

The use of CKD and IKD imports is carried out based on the Regulation of the Minister of Industry of the Republic of Indonesia No. 28/2020 concerning Battery-Based Electric Motor Vehicles in Complete Decomposition and Incomplete Decomposition.

Meanwhile, the Domestic Component Level (TKDN) of the KBLBB IKD is in line with the Regulation of the Minister of Industry of the Republic of Indonesia No. 27/2020 concerning Specifications, Roadmaps for Development, and Provisions for Calculation of the Domestic Component Level of Battery-Based Electric Vehicles (Battery Electric Vehicles).

"This incentive will make the KBLBB industry more developed because it will reduce production costs and encourage industries to produce KBLBB by utilizing goods that have been produced domestically so that the price of vehicles is more affordable for the community," said Head of the Fiscal Policy Agency of the Ministry of Finance, Febrio Kacaribu, quoted by VOI, Monday, September 19, 2022.

Those are two types of electric car incentives to speed up the electrification process in the country. In addition to providing incentives, the government also issued Presidential Instruction (Inpres) No. 7/2022 concerning the Use of Battery-Based Electric Motor Vehicles as Vehicles of the Operational Service and Or Individual Vehicles of the Central Government and Regional Government Agencies Service.