The Government Will Provide An Electric Vehicle Subsidy, Chairman Of The DPR Budget: Not In The 2023 State Budget

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Industry plans to provide subsidies for electric vehicles of IDR 80 million and hybrid-based cars of IDR 40 million, as well as new electric motors of IDR 8 million.

Responding to this, the Chairman of the Budget Agency (Banggar) of the DPR RI Said Abdullah said that the plan to provide subsidies was not in the 2023 State Budget.

Said assessed that the plan for such a large subsidy for cars and electric motors is not comparable to the allocation of social protection programs received by each poor household.

"If this subsidy will be realized in the form of cash for the purchase of cars and electric motors, and if it is realized next year, we emphasize that there will be no 2023 APBN allocation for the policy support," Said said at the Energy Corner quoted on Tuesday, December 20.

Said asked the government to review the policy again.

Moreover, he continued, in 2023 Indonesia must be prepared to face an uncertain global economic situation and require fiscal resilience in the APBN.

"Is it appropriate, in the midst of our situation we will face a difficult global economy, whose effect will certainly have an impact on the domestic economy and then we think about subsidies for a capable household? Moreover, more than half of our people who have not met the standards of nutritious food, and the prevalence of stunting under five is still high, of course this is out of the limit of propriety," he said.

"The main mandate of our constitution and our country is to eradicate the people from poverty. This must be our main perspective in formulating priority policies," continued Said.

Said added that many incentives have been given by the government to the electric vehicle industry. Therefore, the plan to provide subsidies for cars and electric motors should be carefully and carefully considered, so that Indonesia's acceleration towards low-emission transportation, the agenda of reducing oil imports, efforts to make the state budget healthy and sustainable policies to reduce poverty levels can run in balance.

Still related to the development of the Battery-Based Electric Motor Vehicle (KBLBB) ecosystem, the government through Presidential Decree Number 55 of 2019 concerning the Acceleration of the Battery Electric Vehicle Program for Road Transportation, in order to grow the battery-based electric motor vehicle ecosystem.

Said noted that the regulation provides added value to the revival of the domestic industry. Aspects such as the Domestic Content Level (TKDN) are also regulated in stages, where the TKDN component is expected to increase in size from the specified time target, where TKDN for two wheels in 2026 is 80 percent and 2030 for four wheels with a minimum of 80 percent.

"We hope that this target can be consistently met. The government also prioritizes domestic industry players as actors, it is important for the creation of the KBLBB ecosystem, although a number of important technologies are still controlled by foreign industry players. However, the government must provide incentive support for investment in domestic capital for the electric vehicle industry. If the scheme is foreign investment, then it is necessary to involve the supply chain of production by more national partner partners, both state-owned enterprises and domestic private sector," he explained.

It is known that the government has issued tax incentive policies for KBLBB through various policies including a 20-year tax holiday, import duties for cars are completely knocked down and completely knocked down by 0 percent, and reduced transfer duties for motorized vehicles by up to 90 percent.

If the total tax incentives reach 32 percent of the selling price of electric cars and 18 percent of electric motors. Support for tax incentives is a breath of fresh air for the KBLBB industry, and we should appreciate it. Most recently, on September 22, 2022, the government issued Presidential Instruction (Inpres) No. 7 of 2022 concerning the Use of KBLBB as an operational vehicle or service for the central and regional governments. This Presidential Instruction will of course encourage demand for KBLBB, and fresh air for the electric vehicle industry," concluded Said.