- The Minister of Finance (“Minister”) has proposed that the tariff scheme for the Luxury Goods Sales Tax (Pajak Penjualan Barang Mewah – “PPnBM”) for electric vehicles be readjusted in order to promote investor interest in the development of electric vehicles in Indonesia. The proposed adjustments to the current PPnBM tariffs are based on two schemes, specifically Scheme I and Scheme II.
- Under the proposed Scheme I tariff, the PPnBM adjustment breaks down as follows: 1) The BEV type will remain PPnBM free; 2) PHEV type: 5% PPnBM; 3) Full hybrid type: 6% - 8% PPnBM; and 4) Mild hybrid type: 8% - 12% PPnBM. However, this scheme will only be applicable if an actual investment amounting to at least IDR 5 billion is made within the electric vehicle industry.
- Under the proposed Scheme II tariff, the PPnBM adjustment breaks down as follows: 1) The BEV type will remain PPnBM free; 2) PHEV type: 8% PPnBM; 3) Full hybrid type: 8% - 12% PPnBM; and 4) Mild hybrid type: 12% - 14% PPnBM. Scheme II will be applied within two years of an investment realization within the electric vehicle industry hitting the IDR 5 billion threshold or of electric vehicles being commercially produced with investment realizations of IDR 5 billion. (ANT)
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