Heaptalk, Jakarta — In response to the misinformation about the incentive scheme for electric and hybrid vehicles, Indonesia’s Ministry of Finance has clarified that the government will continue to offer an incentive for Electric Vehicles (EVs) in the form of a Government-Born Value-Added Tax (VAT DTP) of 10% through this year.
“This means that for an electric vehicle subject to a 12% VAT, consumers will only pay about 2%, with the government covering the remaining 10%,” Senior Policy Analyst at the Fiscal Policy Agency of the Finance Ministry, Rustam Effendi, conveyed.
Regarding the hybrid vehicles, the incentive scheme comes as a discount on the Luxury Goods Sales Tax (PPnBM DTP) of 3%. “The government covers about 3% of the PPnBM for hybrids, while consumers pay the rest. For instance, a full hybrid previously taxed at 6% will only be 3%. Other hybrids will adjust according to the Ministry of Industry’s program,” he elaborated.
Furthermore, Rustam explained that the Minister of Finance Regulation (PMK) outlining the technical rules and requirements for hybrid vehicle incentives is currently being drafted and is expected to be issued before the end of January 2025.
He also clarified that the 100% VAT discount, valid until June 2025 and decreasing to 50% in the second half of 2025, applies only to home purchases, not to electric or hybrid vehicles, as the Minister of Finance, Sri Mulyani, previously mentioned.
