Not Only Cars, Sri Mulyani Discounts VAT On Electric Buses

JAKARTA - Finance Minister Sri Mulyani announced that she would provide a Value Added Tax (VAT) discount from 10 percent to only 1 percent for electric vehicles.

He explained that this incentive was intended to accelerate economic transformation to increase the attractiveness of investment in the KBLBB ecosystem, accelerate the shift from using fossil-based fuels to electricity and also to increasing public interest in electric vehicles.

"So the VAT incentive is given 10 percent so that the VAT that must be paid is only 1 percent," he said at a press conference quoted on Tuesday, March 21.

Meanwhile, for electric buses, incentives provided for vehicles with Domestic Component Level (TKDN) above 20 to 40 percent are given a VAT discount of 5 percent.

"Thus, the VAT that must be paid is 6 percent," he continued.

Meanwhile, models and types of vehicles that have met the TKDN requirements will be obtained through a decision of the ministry of industry.

Previously, Sri Mulyani also revealed a number of incentives to develop a Battery-Based Electric Motor Vehicle (KBLBB) ecosystem, including a tax holiday of up to 20 years.

Second, super deduction of up to 300 percent for development and research. Third, VAT is exempted from mining goods including nickel ore as raw material for making batteries. Fourth, VAT is exempted for imports and the acquisition of capital goods in the form of machinery and factory equipment for the motorized vehicle industry.

Furthermore, PPNBM for domestic electric cars and the Ministry of Industry program is 0 percent compared to non-electric PPNBM vehicles of 15 percent. Sixth, car import entry fees or Incompletely Knock Down (IKD), 0 percent of import duties Completely Knock Down (CKD) 0 percent through cooperation between FPI and CEPA including Korea and China. Finally, local taxes in the form of reducing motor vehicle name duties (BBN) and motor vehicle taxes (PKB) by 90 percent.