Minister of Finance Order No.38 2023 on VAT reduction for Battery Electric Vehicle

In 2023, the Ministry of Finance enabled a Value Added Tax (VAT) reduction on battery electric vehicles until the end of the fiscal year. The incentive was further extended until December 2024. The incentive is part of Indonesia's commitment to accelerate the sale of Electric Vehicles (EVs) as well as to boost investments in EVs ecosystem. 

The VAT reduction includes:
1) A 10% cut for cars and buses with a minimum 40% of local content;
2) A 5% tax reduction for cars and buses with less than 40% and minimum of 20% local content.

Want to know more about this policy ? Learn more