Posted on 05 Apr 2023
The Indonesian government has lowered its value-added tax (VAT) for battery-based electric vehicles from 11% to 1%.
This VAT incentive is valid for fiscal year 2023 covering the tax period of April-December 2023, according to a statement issued by Indonesia's Maritime and Investment Affairs.
This incentive is expected to stimulate the rapid transformation of the economy, raise public interest in using EVs and increase related investments on ecosystems surrounding battery-based vehicles, Kallanish learns.
In order to be considered for this incentive of only 1% VAT, the domestic content level should be over 40%. For vehicles with the domestic content level between 20% and 40%, the VAT will be only 6%. The detailed vehicle model and type will be stipulated by Decree of the Minister of Industry Number 1641 of 2023.
According to CNN Indonesia, the major two models that satisfy the 40% requirement are Hyundai's Ioniq 5 and Wuling's Air EV. The major four automakers that are likely to receive subsidies are Mobil Anak Bangsa (MAB), Inka, Bakrie and Indonesian Electric Vehicles (KLI).
Source:Kallanish
