Indonesia prepares tax holidays for electric cars this month

Tinuku - Indonesia announced to launch a tax holiday for the regulation of electric cars this month. Indonesian’s Minister of Industry, Airlangga Hartarto, on Thursday said the incentive plan would be held in August and believed the regulatory recommendations to the Ministry of Finance about it would be published.

The Ministry of Industry has prepared the development of electric vehicles through the Low Carbon Emission Vehicle (LCEV) roadmap which includes the development of low carbon for conventional engines at Low Cost Green Car (LCGC) and hybrid-electric technology, as well as zero carbon for electric vehicles.

Tinuku Indonesia prepares tax holidays for electric cars this month

"The incentive plan is coming this August, along with other incentives, including the super deductable tax for vocation and innovation," Hartarto said.

Indonesia's target in 2020 could produce 10 percent of LCEV products from the estimated 1.5 million units of total car production in Indonesia. By 2025, the ministry estimates that LCEV products can reach 20 percent of the 2 million units of domestic production cars, and by 2030 LCEV production to 25 percent from 3 million units to 30 percent from 4 million units by 2035.

The ministry recommended tax holiday is aimed at electric vehicle manufacturers and companies that develop battery technology and electric motor drive. This effort is said to form a manufacturing structure, boost productivity and increase competitiveness.

The government also wants to help Completely Knock Down (CKD) producers of electric vehicles by reducing the import duty tax to 0 - 5 percent from the current 5-10 percent, while for producers Incompletely Knock Down (IKD) will get 0 percent tax from now subject to import duty tax of 7.5 percent.

"From the decline, the producers can pre-marketing for electric vehicles, so get the volume of production, and encourage sales and increase investment," said Hartarto.