The Minister of Industry of Indonesia is optimistic that the abolition of value-added tax (VAT) on imports of completely built up (CBU) electric cars can expand the electric vehicle (EV) market in Indonesia. The 0% VAT for electric car CBU is one of the government's efforts to expand the market and make people more familiar with electric vehicles in Indonesia. This is considering the production target of electric cars or EVs in 2035 to reach 1 million units. Furthermore, The Minister of Industry also revealed that by eliminating the import tax on CBU EV cars, it is expected to stimulate potential investors to bring in the domestic EV car market. There are terms and conditions that apply to parties who will receive the elimination of the CBU EV car import tax. The incentive was only given to potential investors who had submitted investment plans to the government. If potential investors have fulfilled this, the government will provide relaxation of import duties until 2026. Meanwhile, the incentive reduces the import duty on CBU EV cars from 50% to 0%.
The government also plans to eliminate the sales tax on luxury goods (PPnBM) of CBU imported EV cars which currently reaches 125%, if potential investors have submitted production and investment plans to the government. Furthermore, the government will determine the CBU import quota to be given. The government also considered two approaches in providing CBU EV car import quotas, namely based on investment realization and production plans. For example, potential investors who have realized their investment as much as 50 percent, will get an import quota of 50,000 CBU EV cars.
