The Indonesian government in efforts to push the adoption of Electric vehicles is providing value-added tax (VAT) incentives of up to 10 percent this year on the purchase of electric cars and buses.
“We are in the middle of harmonising the final draft to issue the Finance Minister Regulation on the VAT incentives for electric cars and buses,” Finance Minister Sri Mulyani Indrawati said at the launch of the “Government Assistance Policy for Battery-Based Electric Vehicle” on Monday.
She informed that a 10-percent VAT incentive would be provided for electric cars and buses with a domestic component level of above 40 percent, in accordance with the Industry Ministry’s requirements.
Thus, only one percent VAT would be imposed on those products, the minister noted — as the Indonesian Government imposes an 11 percent VAT on every product.
Furthermore, electric cars and buses, which have a TKDN of above 20 percent to 40 percent, will be given a 5 percent VAT incentive, she said.
She added that the models and types of vehicles that have met TKDN requirements will be stipulated by an Industry Minister Regulation.
The provision of the incentives aims to expedite national economic transformation, increase investment attractiveness of the national battery-based electric vehicle industry, accelerate the energy transition from fossil to electric energy, and increase public interest in the utilization of electric vehicles.
