Indonesian Government Launches Incentives to Accelerate Adoption of Electric Vehicles
INTI,- In order to support the acceleration of electric car and electric bus adoption, the Indonesian government has launched a program that provides tax incentives for the purchase of these vehicles. The incentive program, called the Government-Borne Value-Added Tax (VAT-DTP), is provided with a requirement of a minimum 40% domestic component level (TKDN) for electric cars and a minimum 20% TKDN for electric buses.
This policy is outlined in the Ministry of Finance Regulation No. 38 of 2023 on Value Added Tax on the Delivery of Certain Battery-Based Electric Vehicles and Battery-Based Electric Buses that are Borne by the Government in the 2023 Fiscal Year. Following the regulation, the Ministry of Industry has also issued Ministerial Decree No. 1641 on Certain Battery-Based Electric Vehicles and Battery-Based Electric Buses that Meet the Domestic Component Level Criteria, which Allows Them to Utilize Government-Borne Value Added Tax in the 2023 Fiscal Year.
"There are two models of battery-based electric vehicles with a TKDN value that meets the minimum 40% criteria so they can utilize VAT-DTP, as listed in the appendix of Ministerial Decree No. 1641," explained Febri Hendri, Director General of the Metal, Machinery, Transportation Equipment, and Electronics Industry at the Ministry of Industry.
The Ministry of Industry is currently awaiting the TKDN certification results of five electric bus models assembled in Indonesia, with a predicted minimum TKDN of 20%. The Ministry will update the list of Ministerial Decree appendix by including electric bus models once they obtain TKDN certification.
Febri Hendri added that after the implementation of the VAT-DTP program, there has been a significant increase in the sales of battery-based electric vehicles. In April, there was an increase of 1,345 units sold, a 44% increase compared to March's 928 units sold.
"The provision of KBLBB incentives, whether in the form of VAT-DTP or the Government Purchase Assistance Program, is expected to encourage mass adoption of KBLBB and improve public access to KBLBBs at more affordable prices," concluded Febri Hendri.***. Hans
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