Zero-Tax Policy Introduced for EV: Governors Ordered to Exempt Electric Vehicles from Applicable Taxes to Accelerate Uptake

OVERVIEW 

The Minister of Home Affairs (“Minister”) has just issued Circular No. 900.1.13.1/3764/SJ (“Circular 3764/SJ”), which officially came into force on 22 April 2026. This new framework coordinates the provision of fiscal incentives for electric vehicles at the regional level by requiring governors to grant exemptions from Motor-Vehicle Tax (Pajak Kendaraan Bermotor – “PKB”) and Motor-Vehicle Title Transfer-Duty (Bea Balik Nama Kendaraan Bermotor – “BBNKB”) for Battery-Powered Electric Motor Vehicles (Kendaraan Bermotor Listrik Berbasis Baterai – “KBLBB”).[1]