The Indonesian government will end tax incentives for completely built-up (CBU) battery electric vehicles (BEVs) in December 2025. This was confirmed by Minister of Industry Agus Gumiwang Kartasasmita.

Previously, imported electric vehicles received incentives in the form of exemption from import duties and luxury goods sales tax (PPnBM).

CBU BEVs Received 65% Tax Discount Under Current Incentive

The incentive program allowed BEV imports to pay 0% import duty, down from the normal 50%, and 0% PPnBM, down from 15%. In total, BEVs only paid 12% in taxes instead of 77%, resulting in a 65% discount.

These incentives began in February 2025, with the deadline for applications set for 31 March 2025. The program officially ends on 31 December 2025.

Future Incentives Tied to Domestic Content Requirements

Setia Diarta, Director General of Metal, Machinery, Transportation Equipment, and Electronics Industries (ILMATE) at the Ministry of Industry, said that manufacturers are required to shift to domestic production according to the Local Content Requirement (TKDN) policy.

From 2024 to 2026, BEVs with 40% TKDN are eligible for incentives. In 2027–2028, the minimum TKDN requirement increases to 60%.

Only BEVs that meet TKDN requirements under the production program are eligible for a 10% government-borne value-added tax (VAT), reducing the payable amount to 2%.

PHOTO: UNSPLASH

This article was created with AI assistance.