Jakarta, CNBC Indonesia – Minister of Finance Sri Mulyani Indrawati explained a number of incentives that would be given for electric cars and buses. The provision of this incentive aims to provide support to increase investment in electric vehicles in the country.
“Increasing investment while still considering the principles level of playing field for all taxpayers,” said Sri Mulyani in a press conference at the Coordinating Ministry for Maritime Affairs, Monday (20/3/2023).
For electric cars and buses, there are 7 types of fiscal incentives provided by the government. First, tax holiday up to 20 years according to the value of the investment. This incentive is given to the electric car and bus industry, steel and its derivatives, including nickel smelters and battery production. Second, super tax deduction up to 300% for battery power industry research and development costs.
Third, Value Added Tax (VAT) is waived on mining prices, including nickel ore. Fourth, VAT is exempted from imports and acquisition of capital goods in the form of factory machinery and equipment. Fifth, PPnBM for domestic electric cars, including the Ministry of Industry’s program, with a 0% rate compared to 5% – 15% for other vehicles.
Sixth, import duty most favoured nation (MFB) import for Incompletely Knocked Down (IKD) cars is 0% and the import duty for Completely Knock Down (CKD) is 0%. This is done through several FTE and CEPA collaborations, including South Korea and China. And finally, local tax incentives in the form of a reduction in the cost of turning over the name of a motor vehicle and motor vehicle tax by 90%.
Furthermore, Sri Mulyani said that in order to accelerate economic transformation to increase investment, accelerate the transition from fossil energy to electric energy and to increase public interest in electric vehicles, VAT is applied for electric cars and electric buses as follows:
1. An electric car or bus with a Domestic Component Level (TKDN) above 40% and following the Ministry of Industry’s program will be given a VAT incentive of 10% so that only 1% of VAT must be paid.
2. Cars or electric buses with a Domestic Component Level (TKDN) of 20-40% are given a 5% incentive, so VAT must be paid at 6%.
The TKDN provisions in question are regulated by the Ministry of Industry.
“Accumulatively the incentives given from a tax fiscal perspective during the estimated usage period will reach 32% of the selling price of electric cars and 18% of the selling price of electric motorbikes,” he concluded.
(hsy/hsy)
