Monday, October 2, 2023

KADIN: EV Policy Needs Adjustments

June 22, 2023 | 12:59 pm
Wuling Air Electric Vehicle. (Photo: Herman)
Wuling Air Electric Vehicle. (Photo: Herman)

Jakarta. Vice Chairman of Indonesia's Chamber of Commerce (KADIN) Industry Department, Bobby Gofar Umar, said that the implementation of the government's electric vehicle (EV) incentive program requires some adjustments. This is crucial to ensure that the incentives can achieve the government's intended targets.

"In principle, we support the government's incentive or subsidy program aimed at accelerating motor vehicle electrification. However, it appears that some adjustments are needed in its implementation," said Bobby, as quoted by Antara on Thursday.

According to Bobby, one aspect that requires adjustment is the tax restitution process, as it is seen as a hindrance to the smooth operation of the program.

Previously, the government has determined the incentive amount for electric cars with a domestic component level of 40 percent, which includes a 10% reduction in Value-Added Tax (VAT). Through this incentive program, the VAT imposed on buyers is only 1%. In the process, the dealers bear the 10% VAT, which will later be reimbursed by the government.


"From the manufacturer, they still charge the dealer 11% VAT. While the incentive for electric vehicles is only 1%. So, that 10% can be reimbursed from the dealer to the manufacturer and then to the government," said Bobby.

He said that the restitution process creates a bottleneck or congestion in tax disbursement. Therefore, Bobby suggests that the government simplifies the procedure for distributing electric vehicle incentives.

"Why not directly charge the consumer only 1 percent, so there is no need for restitution and so on? It simplifies the procedure," he said.

Regarding the subsidy program for electric motorcycles, Bobby said that the verification process for beneficiaries is not easy. Therefore, further socialization and system updates are needed to make it easier for potential consumers and dealers.

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