Government Provides Tax Incentives For Purchase Of Cars And Electric Buses

JAKARTA - The government provides Government-Borrowed Value Added Tax (PPN DTP) incentives for the purchase of four-wheeled electric vehicles and buses to support the acceleration of electric vehicle adoption.

The decision was made through the Minister of Finance Regulation (PMK) Number 38 of 2023 concerning Value Added Tax on the Delivery of Certain Four-wheeled Battery-Based Electric Motorized Vehicles and Certain Bus Battery-Based Electric Motor Vehicles Borne by the Government for Fiscal Year 2023 (PMK PPN DTP Electric Vehicles).

The DTP VAT incentive applies to the 2023 fiscal year by entering into effect from April 2023 to December 2023 tax period.

"In its implementation, this program will take place in stages and measurable," explained the official statement from the Coordinating Ministry for Maritime Affairs and Investment (Menko Marves) in Jakarta, quoted from Antara, Monday, April 3.

The provision of incentives is in line with the roadmap for accelerating battery-based electric motorized vehicles and refers to Presidential Regulation number 55 of 2019.

Incentives for VAT DTP will be given to electric cars and electric buses with certain Domestic Component Level (TKDN) criteria.

For models and types of vehicles that meet the TKDN requirements, it is stipulated by the Decree of the Minister of Industry Number 1641 of 2023 concerning Electric Motorized Vehicles Based on Certain Four-wheeled Batteries and Certain Bus Battery-Based Electric Motorized Vehicles that Meet the Criteria for Domestic Component Level Values for their Submission can take advantage of the Value Added Tax Borne by the Government for the 2023 Fiscal Year.