A worker cleans an electric-powered car Neta V, that is displayed during the Gaikindo Indonesia International Auto Show in Tangerang, near Jakarta, Indonesia, Aug, 2023. - Photo: Reuters
JAKARTA (Vietnam News/ANN): In a bid to attract more investment to the electric vehicle (EV) sector, the Indonesian government has announced new regulations offering tax incentives to automakers planning to establish EV plants.
The presidential regulation, signed on December 8 and announced this week, extends tax benefits to companies already invested in EV manufacturing, those planning to enhance their EV investments, or those intending to make new investments in the sector.
The new regulations will grant automakers that plan to build electric vehicle plants tax incentives on their imports of completely built EVs until 2025.
The new rules will remove the import duties and the luxury-goods sales tax on the built-up vehicles brought into the country and give incentives on taxes collected by provincial governments.
Earlier rules only granted these incentives to imports of knocked-down vehicles, which are delivered in parts and assembled in the country where they are sold. Indonesia is Southeast Asia's biggest auto market.
However, the number of vehicles companies can import will depend on the investment size and development progress of the plant, and must be approved by the investment ministry.
Speaking at a webinar on Indonesia's economic prospects on December 13, Rachmat Kaimuddin, a deputy at the Coordinating Ministry of Investment and Maritime Affairs, said the new decree would help automakers build their market in the country through EV imports.
Indonesia's government has set an ambitious target of producing some 600,000 EVs by 2030. That would be more than 100 times the number sold in Indonesia in the first half of 2023.
Some companies including Hyundai have invested in Indonesia followed by investment commitments by China's Neta EV brand and Mitsubishi Motors. Indonesia is also wooing Tesla and China's BYD. - Vietnam News/ANN
