Indonesia is set to offer tax incentives to electric vehicle (EV) producers, aiming to attract more investment with new regulation relaxing import tax rules.
The Indonesian government is introducing tax incentives for electric vehicle (EV) manufacturers, aiming to attract more investments in the EV sector until 2025. This new presidential regulation demonstrates the government’s effort to boost investment and support the growing EV market in Indonesia.
The new regulation exempts import duties and luxury goods tax on completely built-up (CBU) electric vehicles, a significant shift from the previous rule that only incentivized knocked-down imports.
Companies are eligible for these incentives if they have already invested in, plan to increase investment in, or intend to invest in electric vehicle production in Indonesia. The number of vehicles a company can import depends on their investment size and factory development progress.
President Joko Widodo’s recent visit to PT HLI Green Power’s electric car factory in Karawang highlights the government’s commitment to the EV industry.
The new regulation extends the deadline for companies to produce at least 40% of EV content in Indonesia to 2026, giving manufacturers more time to comply with local production requirements.
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This initiative aligns with Indonesia’s ambitious target to produce around 600,000 electric vehicles by 2030, bolstering the country’s position as a major automotive market in Southeast Asia.
The relaxation of import tax rules for EVs in Indonesia is a strategic move to attract foreign investment, accelerate the domestic EV market, and position Indonesia as a key player in the global EV industry.
Indonesia introduces new tax incentives for electric vehicle producers to foster investment and local production. This move aims to boost the country’s EV market, aligning with the goal of producing 600,000 electric vehicles by 2030 and solidifying Indonesia’s role in the global automotive sector.
Source: VOA Indonesia, Liputan6.com (2023)
