Banten Provincial Government Exempts Electric Vehicle Taxes

The Provincial Government (Pemprov) of Banten has stated its support for accelerating the national transition to clean energy by following the central government’s policy on tax exemptions for battery-based electric motor vehicles.

Banten Deputy Governor Achmad Dimyati Natakusumah said the region will adjust its fiscal regulations in line with the issuance of the Minister of Home Affairs’ Circular No. 900.1.13.1/3764/SJ, which grants authority for providing such tax incentives.

“We follow the central regulations for electric vehicles. If the centre has already regulated it, we follow,” Dimyati stated, as quoted from Antara on Sunday, 26 April 2026.

The policy, signed on 22 April 2026, encourages local governments to exempt Motor Vehicle Tax (PKB) and Motor Vehicle Ownership Transfer Fee (BBNKB) for owners of electric vehicles.

While fully supporting the environmental mission, Dimyati noted fiscal challenges. According to him, the trend of increasing electric vehicle use could potentially affect the structure of Regional Own-Source Revenue (PAD) from conventional vehicle taxes.

“This is indeed two sides. We want to be environmentally friendly, but on the other hand, there is an impact on PAD. This must be balanced,” he said.

Dimyati explained that the issue of potential regional revenue decline has been conveyed in coordination forums with the Coordinating Ministry and the Minister of Home Affairs as material for future policy considerations.

Nevertheless, the Banten Provincial Government assures that implementation in the field will remain aligned with the latest provisions set by the central government to promote an environmentally friendly vehicle ecosystem in the Banten region.

“In principle, we follow the central regulations. For now, we implement according to the existing provisions,” Dimyati said.

Previously, the Ministry of Home Affairs requested all regional heads in Indonesia to provide fiscal incentives in the form of electric vehicle tax exemptions. The instruction is contained in the Minister of Home Affairs’ Circular on the Provision of Fiscal Incentives in the form of Exemption of Motor Vehicle Tax and Motor Vehicle Ownership Transfer Fee for Battery-Based Electric Motor Vehicles.