The government is providing Value Added Tax (VAT) incentives for the purchase of electric four-wheeled vehicles and buses, aiming to accelerate the economic and electric vehicle transformation in Indonesia. The regulation has been stipulated in the Ministry of Finance Regulation No. 38 of 2023 regarding VAT on the Sale of Specific Battery-Based Electric Four-Wheeled Motor Vehicles and Battery-Based Electric Buses, which is borne by the government in Fiscal Year 2023. The incentive will be gradually and measurably implemented, according to the Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan.
This program is in line with the roadmap for the acceleration of battery-based electric vehicles, based on Presidential Regulation No. 55 of 2019, with certain domestic component level criteria. The eligible models and types of vehicles are set by the Minister of Industry's Decision No. 1641 of 2023 concerning Specific Battery-Based Electric Four-Wheeled Motor Vehicles and Battery-Based Electric Buses that Meet the Criteria for Domestic Component Level Value, which can utilize VAT borne by the government in Fiscal Year 2023.
