Director for maritime, transportation equipment, and defense equipment industries at the ministry, Mahardi Tunggul Wicaksono, said here on Monday that his ministry is coordinating with other ministries in designing the incentives.
Those ministries are the Coordinating Ministry for Economic Affairs, the Ministry of Energy and Mineral Resources, and the Ministry of Finance.
He affirmed that the government is continuing to accelerate the transformation of the national automotive industry toward the electrification era through the provision of fiscal and non-fiscal incentives.
In this regard, the Ministry of Industry has issued several strategic regulations to support the net-zero emission (NZE) target.
One of the key instruments, he said, is strengthening regulations that require the fulfillment of the domestic component level (TKDN) standard in the vehicle production process.
According to Wicaksono, automotive companies that meet the local purchase and TKDN provisions can get both fiscal and non-fiscal incentives.
"This is a strategic step for creating an independent and competitive automotive industry," he said.
He further said that, as a form of support, the government has prepared tax incentive programs for companies that demonstrate their commitment to investing in Indonesia.
The incentive includes exemption from import duties and luxury goods sales tax for completely built-up (CBU) electric vehicles and completely knocked down (CKD) electric vehicles whose TKDN is still below the road map provisions.
Automotive companies that produce hybrid vehicles and are a part of the low-carbon-emission vehicle (LCEV) program are also being provided the 3 percent government-borne luxury goods sales tax incentive.
Wicaksono emphasized that these incentives are key stimuli for building an integrated national electric vehicle industry.
He noted that the incentive for the CBU BEVs will end in 2025, while the one for CKDs will be evaluated.
"We believe that with the synergy of regulations, incentives, and investments, Indonesia can become a main player in the future vehicle industry," he said.
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Translator: Ahmad Muzdaffar, Raka Adji
Editor: Arie Novarina
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