VAT Incentive For Electric Cars Available Until December

According to reporting from Antara News,  Febrio Kacaribu, the head of the Finance Ministry’s fiscal policy agency, has announced that the VAT incentive provided by the government (PPN DTP) for the purchase of electric cars and buses would be valid for the April 2023 to December 2023 tax period.

“This policy was issued to accelerate economic transformation to increase the attractiveness of investment in the electric vehicle ecosystem,” Kacaribu noted in an official statement received on Tuesday.

In addition, the policy aims to expand employment opportunities and accelerate the transition from the use of fossil energy to electricity, as an effort to reduce emissions and strengthen energy subsidy efficiency, he remarked.

Antara News say the incentive is regulated in Minister of Finance Regulation (PMK) Number 38 of 2023 on Value-added Tax of Certain Four-Wheeled Battery-Based Electric Motorized Vehicles and Certain Bus Battery-Based Electric Motorized Vehicles Borne by the Government for the 2023 Fiscal Year.

The provision of electric four-wheeled vehicle incentives is available in two schemes. Under the first scheme, four-wheeled battery-based electric motorized vehicles (KBL) and buses with domestic component level (TKDN) equal to 40-percent or more will be given PPN DTP of 10-percent, and the consumers only need to pay 1-percent PPN.

Based on the second scheme, bus battery-based vehicles, with TKDN amounting to 20 to 40-percent, will be given PPN DTP of 5-percent, and consumers must pay the 6-percent PPN, say Antara News.

The models and types of vehicles that meet TKDN requirements are stipulated in Decree of the Industry Ministry Number 1641 of 2023.

The TKDN value criteria must be in line with Presidential Regulation Number 55 of 2019, as well as the roadmap for the battery-based electric motorized vehicle acceleration program from the Industry Ministry, Kacaribu remarked.

Meanwhile, the Director General of Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) Industry of the Industry Ministry, Taufiek Bawazier, stated that the government aims to increase the people’s interest in purchasing electric vehicles and support the electric vehicle ecosystem in the country through the PPN DTP programme, report Antara News.

“In the early stages, it is estimated that the PPN DTP facility will be used to cover the purchase of 35,862-electric cars and 138-electric buses in 2023,” he stated.

For the technical implementation of tax facilitation, Bawazier said his side would conduct supervision of the TKDN values by an independent verification agency appointed by his side.

If the supervision finds that the electric vehicle has not complied with the TKDN requirement, then the Directorate General of ILMATE will impose administrative sanctions by revoking the electric vehicle from the PPN DTP list, he explained.

Source: Antara News

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