Officially Effective! Buy Electric Cars Only Subject to 1 Percent VAT, Check the Requirements

Dream - The government officially provides tax incentives for electric cars and electric buses from April to December 2023. This incentive is in the form of Value Added Tax (VAT) borne by the government.

This policy is stipulated in the Minister of Finance Regulation (PMK) Number 38 of 2023 concerning Value Added Tax on the Delivery of Certain Four-Wheeled Battery-Based Electric Motor Vehicles and Certain Battery-Based Electric Motor Buses Borne by the Government for the 2023 Fiscal Year (PMK VAT DTP Electric Vehicle).

"In its implementation, this program will be carried out gradually and measurably," said Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, on Monday, April 3, 2023.

The provision of VAT DTP incentives for the purchase of certain four-wheeled electric motor vehicles and buses is given for:

• First, Four-Wheeled Battery-Based Electric Motor Vehicles (KBL) with Domestic Component Level (TKDN) ≥ 40 percent, will be given a 10 percent VAT DTP so that the VAT to be paid is only 1 percent.

• Second, Battery-Based Electric Motor Buses with 20 percent ≤ TKDN < 40% are given a 5 percent VAT DTP so that the VAT to be paid is 6 percent.

"This policy is launched in order to accelerate economic transformation to increase investment attractiveness in the electric vehicle ecosystem, expand job opportunities, accelerate the transition from fossil energy to electric energy so that in the future it is expected to accelerate emission reduction as well as energy subsidy efficiency," said Head of Fiscal Policy Agency of the Ministry of Finance, Febrio Kacaribu.

Previously, the Director General of ILMATE at the Ministry of Industry, Taufiek Bawazier, said that the Domestic Component Level (TKDN) value criteria take into account alignment with Presidential Regulation Number 55 of 2019 and the roadmap for accelerating battery-based electric motor vehicles from the Ministry of Industry.

"With the implementation of the Value Added Tax Facilitation Program Borne by the Government for certain four-wheeled electric motor vehicles and certain buses, the government hopes that public interest in buying electric vehicles will increase, and support the creation of an electric vehicle ecosystem in the country. In the initial stage, it is estimated that there will be 35,862 electric cars and 138 electric buses in 2023," said Taufiek Bawazier.

Source: Liputan6.com

This is How to Buy Electric Motorcycles to Get a Rp7 Million Subsidy

Dream - Minister of Industry Agus Gumiwang Kartasasmita emphasized that indirect subsidies for electric motorcycles will be given to manufacturers. The mechanism will be through the manufacturer.

"The subsidy will be given to the motorcycle manufacturer. So it's easy for us to control it if it goes to the manufacturer," said Agus in a press conference quoted from Liputan6.com, Tuesday, March 7, 2023.

When consumers buy electric motorcycles through the manufacturer or dealer, the ID card number (NIK) of the prospective buyer will be checked to determine whether they are eligible for a Rp7 million discount.

"Prospective buyers come to the dealer. Then, the dealer checks the NIK on the ID card to see if the buyer is eligible for assistance. If it is confirmed eligible, the buyer will immediately receive a Rp7 million discount," he said.

If deemed eligible, consumers will be ordered a motor vehicle according to the procedure and a subsidy claim will be submitted to the State-Owned Banks Association (Himbara).

After that, after the Himbara bank checks the documents, the bank will pay a Rp7 million subsidy to the electric motor vehicle manufacturer.

"This makes it easier for us to control," added Agus.

Two Electric Motorcycle Assistance Programs

Head of Fiscal Policy Agency, Febrio Kacaribu, also explained that there are two government assistance programs for the purchase of electric motorcycles. The first is a Rp7 million assistance for each new electric motorcycle unit, and the second is for conventional motorcycles that are converted.

"The Government provides assistance for the purchase of new electric motorcycles amounting to Rp7 million per unit for 200,000 units in 2023," said Febrio.

The same amount is also given for 50,000 conventional motorcycles that are converted into electric motorcycles in 2023.

"Earlier, it was mentioned that this is for 50,000 units in 2023, the target recipients of this Government assistance are prioritized for SMEs, especially recipients of KUR (People's Business Credit), and customers with 450 VA electricity," said Febrio.