Regarding Hybrid Car Incentives, Coordinating Minister Airlangga: Being Prepared

Toyota Prius HEV at GIIAS 2024. (Photo: Bagus Muhammad Hafizh / VOI)

Coordinating Minister for Economic Affairs Airlangga Hartarto visited the GAIKINDO Indonesia International Auto Show (GIIAS) 2024 automotive exhibition, at ICE BSD, Tangerang, Banten, this Wednesday.

During this visit, he said that the government was preparing incentives for hybrid car (electric combination and gasoline).

"Incentives are being prepared," he said, as reported by Antara, Wednesday, July 24.

Currently, hybrid cars are subject to a Sales Tax on Luxury Goods (PPnBM) of 6-12 percent. This is different from full electric cars (Battery Electric Vehicles / BEV) which get various facilities, ranging from PPnBM 0 percent to VAT borne by the government (DTP).

The VAT DTP facility is given specifically for electric cars with a Domestic Component Level (TKDN) of at least 40 percent. The amount of VAT DTP given is 10 percent.

Previously, at the opening of GIIAS 2024, last Thursday, the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said that his party would propose incentives for hybrid vehicles to the relevant ministries.

"We try to calculate incentives every day, try to discuss them internally with the government, we will propose especially for hybrid vehicles to the relevant ministries, in this case the Ministry of Finance," said Agus.

The Minister of Industry some time ago also briefly said that the Government-borne Luxury Goods Sales Tax (PPnBM DTP) incentive could be a solution to overcome car market stagnation, thus encouraging sales.

According to him, this fiscal incentive has succeeded in increasing domestic vehicle sales by 113 percent in the March-December 2021 period, as well as in January-May 2022, the program has succeeded in increasing sales to 95 thousand units.

"Regarding the current efforts to increase new car sales, by reflecting on the previous success story of the program, the steps we can take are to provide fiscal incentives in the form of PPnBM DTP for domestically produced vehicles," said Minister of Industry in a speech delivered by the Acting Director General of Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) Ministry of Industry Putu Juli Ardika in a discussion in Jakarta, last week.

According to the Minister of Industry, the provision of incentives is given to vehicles with certain local requirements for domestic content or component levels (TKDN) and prioritizes low-carbon emission vehicles to continue to prioritize the target of zero carbon emissions (net zero emissions/NZE) by 2060.

In addition, support related to interest rate control can also be a step to increase sales of new four-wheeled vehicles, considering that in the last 10 years, domestic car sales have tended to be at 1 million units.