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 value-added tax (VAT) relief. Currently, subsidies for electric vehicles are available for two-wheeled vehicles, or motorcycles, which are regulated in Ministry of Industry Regulation 6/2023 (Permenperin 6/2023). Meanwhile, government-borne VAT relief is provided for four-wheeled electric vehicles and electric buses, which is regulated in Ministry of Finance Regulation 38/2023 (Permenkeu 38/2023).

Permenperin 6/2023, which was issued on March 20, 2023, aims to be a continuation of Presidential Regulation 55/2019 regarding the acceleration of the battery-based electric motor vehicle (KBL) program. In article 3 paragraph 7, it has been stipulated 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 fiscal year 2023, and 600,000 units in fiscal year 2024 for beneficiaries of people's business credit; micro business productive assistance; wage subsidy assistance; and/or electricity subsidy recipients up to 900 volt ampere. The two-wheeled battery-based KBL must fulfill several requirements, such as the value of TKDN .

Similar to the above, Permenkeu 38/2023 sees that the percentage of VAT to be borne by the government for electric vehicles is limited to battery-based four-wheelers and buses. dengan syarat nilai TKDN tertentu. 

This regulation includes the following articles:

  • For four-wheeled vehicles, the VAT borne is 10% for four-wheeled KBL that has a TKDN of 40%. For four-wheeled vehicles, the VAT borne is 10% for four-wheeled KBL that has a TKDN of 40%.
  • For electric buses, the VAT borne is 10% for electric buses that have a TKDN of 40% and 5% for electric buses that have a TKDN of 20%. so that the total to be borne by the buyer is 1-6% of the selling price

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