Sri Mulyani Signs New Rules, Buys Electric Cars Enough To Pay 1 Percent Tax

Minister of Finance Sri Mulyani (Photo: Doc. Antara)

Minister of Finance (Menkeu) Sri Mulyani has officially approved the provision of tax incentives for four-wheeled electric vehicles this year.

This is stated in the Minister of Finance Regulation (PMK) Number 38 of 2023 concerning Value Added Tax on the Submission of Certain Four-wheeled Battery-Based Electric Motor Vehicles and Certain Bus Battery-Based Electric Motor Vehicles Borne by the Government for Fiscal Year 2023 (PMK PPN DTP Electric Vehicles).

Head of the Fiscal Policy Agency of the Ministry of Finance, Febrio Kacaribu, said that the provision of VAT DTP incentives for the purchase of new units for Four-wheeled Battery-Based Electric Motor Vehicles (KBL) with a Domestic Content Level (TKDN) of more than 40 percent.

"For electric cars whose TKDN is more than 40 percent, a Value Added Tax (VAT) incentive will be given of 10 percent, so they only pay 1 percent," he said in a written statement on Monday, April 3.

According to Febrio, the provision of tax facilities is currently only focused this year and there has been no determination for further implementation.

"This VAT DTP incentive applies to the 2023 Fiscal Year by entering into effect from April 2023 to December 2023 tax period," he said.

Febrio added that this policy was launched in order to accelerate economic transformation in Indonesia. In addition, the use of stun-based vehicles is believed to be able to increase investment attractiveness.

"The government views that there is also an expansion of job opportunities, accelerating the transition 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," he stressed.

Meanwhile, models and types of vehicles that meet the TKDN requirements are determined by the Decree of the Minister of Industry Number 1641 of 2023 concerning Vehicles with Certain Four-wheeled Battery-Based Electric Motorized Vehicles and Certain Bus Battery-Based Electric Vehicles that Meet the Criteria for Domestic Component Level Values.