Indonesia offers incentive on electric car, bus purchase tax hinh anh 1Illustrative image. (Photo: ANTARA)

Jakarta (VNA) - The head of Indonesian Finance Ministry's fiscal policy agency, Febrio Kacaribu, has announced that the value-added tax incentive provided by the government for the purchase of electric cars and buses will be valid from April to December 2023.

This policy was issued to accelerate economic transformation to increase the attractiveness of investment in the electric vehicle ecosystem, Kacaribu said in an statement released on April 4.

It 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 added.

According to Kacaribu, 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 motorised vehicles for the 2023 fiscal year.

Under the scheme, Indonesia will lower its VAT on battery-based electric cars and buses with domestic component level (TKDN) of 40% or more to 1% from 11%. Electric cars and buses, which have a TKDN of 20% to 40%, will be given a 6% VAT incentive,

For his part, Director General of Metal, Machinery, Transportation Equipment, and Electronics (ILMATE) Industry of the Industry Ministry Taufiek Bawazier said 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.

It is estimated that 35,862 electric cars and 138 electric buses will be exempt from VAT this year./.

VNA