5 March 2018
INDONESIA: Sales Tax and Import Duty Set to be Cut for Electric Vehicles
A 40% luxury goods tax that is currently imposed on the sale of electric vehicles (EVs) in Indonesia is set to be abolished. Further, import duties on EVs, which are currently as high as 40% for certain vehicle types, are set to be fixed at a uniform rate of just 5%. Furthermore, a number of as yet undefined fiscal incentives are also expected to be introduced in a move aimed at giving a further boost to EV manufacturing in the country.
While no implementation date for the abolition of luxury goods tax and the duty reduction on certain EV types has been announced, the measures are expected to spur the demand for EVs in Indonesia, while attracting much-needed FDI into the country’s EV manufacturing sector.