Indonesia Cuts Taxes to Attract Electric Car Investors

Jawad

14 Dec 2023

304

Indonesia Cuts Taxes to Attract Electric Car Investors

In an initiative to attract increased investment, the Indonesian government has unveiled plans to grant tax breaks on fully assembled electric vehicles (EVs) until 2025. This incentive is specifically targeted at auto manufacturers intending to establish electric vehicle plants in Indonesia, the largest auto market in Southeast Asia.

The newly introduced regulations extend benefits to companies that have already invested in EV facilities, plan to expand their EV investments, or are contemplating such investments. According to the updated rules, fully assembled automobiles entering the country will be exempt from import customs and the luxury goods sales tax. Moreover, provincial governments will receive tax incentives, a departure from previous rules that only applied such benefits to imports of knocked-down vehicles, delivered in parts and assembled locally.

However, the quantity of vehicles eligible for import will be contingent on the size of the investment and the progress of the plant's development, requiring approval from the investment ministry. Rachmat Kaimuddin, a deputy at the Coordinating Ministry of Investment and Maritime Affairs, highlighted during a webinar on Indonesia's economic prospects that the new decree aims to support automakers in establishing their market presence through EV imports. He emphasized the forward-looking nature of the initiative, anticipating the growth of the EV industry in Indonesia and the subsequent development of the battery industry and supply chain.

The legislation also extends deadlines, pushing the requirement for companies to produce at least 40% of the content of EVs in Indonesia from 2023 to 2026. Additionally, the initial target of achieving a 60% local content level by 2024 has been postponed until 2027.

Indonesia's government has set an ambitious goal of producing around 600,000 EVs by 2030, a significant increase from the number sold in the country during the first half of 2023. Notably, companies like Hyundai have already made investments, and there are commitments from China's Neta EV brand and Mitsubishi Motors. In a bid to further boost the EV sector, Indonesia is actively courting investments from prominent players such as Tesla and China's BYD.

Indonesia EVs Electric Vehicles Tax Breaks Automotive Industry Indonesia Auto Tax Policy Friendly Tax for Electric Vehicles Indonesia Auto News EV Import Taxes New Rules for EV

« PREV POST
Euro NCAP 2023: 9 Chinese Cars Secure 5 Stars

NEXT POST »
Toyota Announces the Hybrid Corolla Cross Price

Related Auto News Updates