Jakarta, 11 Juli 2023 – Indonesia is ambitious to achieve net zero emission at 2060. One way is to replace vehicles with lower or even zero emission ones, namely electric vehicles. With the increasing adoption of electric vehicles, it is hoped that Indonesia will be able to achieve zero emissions. net zero faster. Therefore, the government has started to introduce subsidies for electric vehicles to encourage the adoption of electric cars, motorcycles, and buses. What are these regulations?

The latest regulations issued by the government include subsidies and reductions in value-added tax (VAT). Currently, subsidies for electric vehicles are given to two-wheeled vehicles, or motorbikes. Regulated in Ministry of Industry Regulation 6/2023 (Permenperin 6/2023). Meanwhile, a reduction in VAT borne by the government is provided for four-wheeled electric vehicles and electric buses. And which is regulated in Ministry of Finance Regulation (Permenkeu 38/2023).

Minister of Industry Regulation Number 6 of 2023 which was issued on March 20 2023 has the aim of being a continuation of Presidential Regulation Number 55 of 2019 which discusses accelerating the battery-based electric motor vehicle (KBL) program. In article 3 paragraph 7, it has been determined that the amount of assistance is IDR 7,000,000.00 for one two-wheeled battery-based KBL per buyer. This assistance is limited to 200,000 units in the 2023 fiscal year, and 600,000 units in the 2024 fiscal year. For those who qualify to receive people's business credit. Productive assistance for micro businesses, wage subsidies, and/or electricity subsidies up to 900 volt amperes. The two-wheeled battery-based KBL must meet several requirements, such as a TKDN (Domestic Component Level) value of at least 40%. TKDN .

In Article 3 paragraph 7, the amount of assistance has been determined at IDR 7,000,000.00. This is for every purchase of one two-wheeled battery-based KBL unit. This assistance has a limit of up to 200,000 units during the 2023 budget year and 600,000 units during the 2024 budget year. And this assistance is provided to beneficiaries, such as those who qualify for people's business credit. Productive assistance for microbusinesses, wage subsidies, and/or electricity subsidies up to 900 volt amperes. This two-wheeled battery-based KBL vehicle must meet a number of requirements. These requirements include minimum Domestic Component Level (TKDN) score requirements

In line with previous regulations, Minister of Finance Regulation (Permenkeu) Nomor 38 Tahun 2023 considers the percentage of VAT that will be borne by the government. This rule applies to electric vehicles which are limited to four-wheeled battery-based KBLs and buses. However, this must be in accordance with the specific TKDN value provisions.

This regulation includes the following articles:

  • For vehicles with four wheels, the VAT borne is 10% for a four-wheeled KBL, which has a TKDN value of at least 40%. So the total that needs to be borne by the buyer is 1% of the selling price.
  • For electric buses, the VAT covered is 10% for electric buses with a TKDN value of 40% and 5% for electric buses. For electric buses with a TKDN value of 20%. So the total that the buyer needs to bear is 1-6% of the selling price.

Article five of this regulation also regulates the VAT validity period. This is from the April 2023 Tax Period to the December 2023 Tax Period. This regulation has been passed since March 29, 2023.