Electric Vehicles to Face Taxation: Review the Latest Regulations
The government, through the Ministry of Home Affairs, has issued Minister of Home Affairs Regulation No. 11 of 2026 on the Basis for Imposing Motor Vehicle Tax, Vehicle Ownership Transfer Fee, and Heavy Equipment Tax.
The new regulation indicates that it will impose a tax burden on electric vehicles in Indonesia, meaning that battery-based cars and motorcycles will now be subject to Motor Vehicle Tax (PKB) and Vehicle Ownership Transfer Fee (BBNKB).
This can be seen from Permendagri No. 11/2026, which does not include electric vehicles as objects exempted from PKB and BBNKB.
“What is exempted from the object of PKB as referred to in paragraph (1) and paragraph (2) is the ownership and/or control of trains; motor vehicles used solely for national defence and security purposes,” as quoted from Article 3 paragraph (3) of Permendagri No. 11/2026, Saturday, 18 April 2026.
“..motor vehicles of embassies, consulates, foreign state representatives on a reciprocal basis, and international institutions that receive tax exemptions from the government; renewable energy motor vehicles; and other motor vehicles designated by regional regulations on local taxes and levies,” states Permendagri No. 11/2026.
The proposal to impose taxes on electric motorcycles and cars can be seen from the differences in the previous regulation, where electric vehicles were specifically mentioned as being exempted from PKB and BBNKB objects.
In Minister of Home Affairs Regulation No. 7/2025 on the Basis for Imposing Motor Vehicle Tax, Vehicle Ownership Transfer Fee, and Heavy Equipment Tax for 2025, renewable energy-based motor vehicles, including electric, biogas, and solar-powered vehicles, as well as motor vehicles converted from fossil fuels to renewable energy-based ones, were exempted from PKB and BBNKB objects.
The same regulation also states that although taxes will be imposed, the amount will not be as high as for conventional vehicles due to incentives provided by each region.
In Article 19, it is stated that the imposition of PKB and BBNKB on battery-based electric vehicles is granted incentives for exemption or reduction of PKB and BBNKB, in accordance with applicable laws and regulations.
Furthermore, the imposition of PKB and BBNKB on electric vehicles manufactured before 2026 is granted incentives for exemption or reduction of PKB and/or BBNKB. This includes vehicles converted from fossil fuels to electric vehicles.