Electric Vehicle Factory Incentive Rules Speeded Up To Completion Next Month

Electric car illustration (Photo: dock.

JAKARTA - Fiscal incentive rules for electric vehicle (EV) companies are being pursued to be completed next month.

Deputy for Infrastructure and Transportation Coordination of the Coordinating Ministry for Maritime Affairs and Investment Rachmat Kaimuddin said the regulation is expected to be a catalyst that accelerates the increase in the portfolio of electric vehicles in Indonesia.

"We will make a policy of providing fiscal incentives to companies that promise to build factories in Indonesia, hopefully this month or next month it can be completed," he said, Wednesday, October 11.

Met separately, Head of the Financial Sector Policy Center of the Ministry of Finance (Kemenkeu) Adi Budiarso said the government always encourages pro-environment policies, including electric vehicles.

"Pro-environmental policies need to be encouraged," said Adi.

The government provides tax incentives for electric cars as stated in the Minister of Finance Regulation (PMK) Number 38 of 2023.

The incentives are in the form of value added tax (VAT) for cars and electric buses which reached 10 percent this year.

VAT incentives of 10 percent are given to cars and electric buses with Domestic Component Level (TKDN) above 40 percent following the Ministry of Industry (Kemenperin) program, so that the VAT imposed will only be 1 percent.

Then, there is also a VAT incentive of 5 percent for cars and electric buses with TKDN of 20 percent to 40 percent, so that the VAT imposed will only be 6 percent.

In addition, the government has also set a subsidy in the form of a discounted price of Rp. 7 million for the purchase of one electric motorcycle which is valid from March 20, 2023. This provision is contained in the Regulation of the Minister of Industry Number 6 of 2023 concerning Guidelines for Providing Government Assistance for the Purchase of Two-wheeled Battery Battery-Based Electric Motorized Vehicles.