Indonesia Pours Electric Motorcycle Subsidy, EV Tax Discount Program
The Coordinating Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan revealed the government's plan to provide electric vehicle (EV) incentives starting in February. The government will grant a Rp 7-million subsidy for every conventional-to-electric motorcycle conversion and a tax discount for electric cars. "The electric cars may get a tax discount from the current 11 percent," Luhut said at the 2023 Saratoga Investment Summit on Thursday.
Luhut said the proposal had been discussed in a meeting with President Joko Widodo and related ministers. The Minister of Finance will issue a Minister of Finance Regulation (PMK) to regulate the details of this incentive on Feb 1.
Luhut was confident that such incentives would encourage low-income people to purchase EVs. He also asked automotive manufacturers to increase EV production immediately. "So, if you want to manufacture an electric motorcycle, just make it. There will be two incentives later," he said. Previously, Finance Ministry's Fiscal Policy Agency head Febrio Kacaribu noted that the EV incentives had not yet been included in the 2023 state budget. The government still has to consult with the House of Representatives (DPR) to determine the budget sources.