Home TECHNOLOGY Government Imposes Zero Percent Tax on Electric Vehicles

Government Imposes Zero Percent Tax on Electric Vehicles

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Government Imposes Zero Percent Tax on Electric Vehicles

The government imposes a motor vehicle tax of zero percent on electric vehicles (EVs), according to Article 10 Number 1 of the Home Affairs Minister’s Regulation (Permendagri) Number 6 of 2023.

The regulation stipulates that the zero percent tax will also be applied to the cost of transferring the ownership of such vehicles.

These incentives are only valid for battery-based EVs, not for EVs converted from fossil-based vehicles.

The issuance of the regulation is in line with the government’s determination to accelerate the adoption of eco-friendly EVs, which is expected to contribute to the government’s efforts to lower carbon emissions to achieve the target of zero emissions by 2060 or sooner.

The government is also providing assistance for the purchase of two-wheeled EVs through subsidies in the form of a discount of Rp7 million (around US$468.8).

The assistance is meant for people who meet certain requirements, namely, they are registered as beneficiaries of people’s business credit (KUR), productive assistance for micro enterprises, wage subsidy assistance, and electricity subsidy of up to 900 volts ampere (VA).

Meanwhile, for the purchase of four-wheeled electric vehicles, the government provides assistance in the form of a 10 percent reduction in value-added tax (VAT).