Home Affairs Minister Requests Regional Governments to Waive Taxes on Electric Vehicles
The Ministry of Home Affairs has requested all regional heads in Indonesia to provide fiscal incentives in the form of tax exemptions for electric vehicle owners. This instruction is contained in the Minister of Home Affairs’ Circular Number 900.1.13.1/3764/SJ on the Provision of Fiscal Incentives in the Form of Exemption from Motor Vehicle Tax and Motor Vehicle Transfer Duty for Battery-Based Electric Motor Vehicles.
Minister of Home Affairs Muhammad Tito Karnavian stated that the instruction aims to improve energy efficiency, energy resilience, energy conservation in the transportation sector, as well as to realise clean energy and maintain environmentally friendly air quality.
Tito explained that the directive was issued considering the dynamics of the global economy that cause instability in the availability and price of energy, including oil and gas, which impact the domestic economic conditions.
He then outlined the provision of incentives in the form of exemption or reduction of regional taxes for electric vehicles, covering motor vehicle tax (PKB) and motor vehicle transfer duty (BBNKB). “The provision of incentives for exemption or reduction of regional taxes in the form of PKB and BBNKB for battery-based electric motor vehicles, including motor vehicles that have been converted from fossil fuel to battery-based electric vehicles,” wrote the Minister of Home Affairs in the circular signed on Wednesday, 22 April 2026.
According to Tito, the provision of incentives for electric vehicles manufactured in 2026 and before 2026 has been regulated in Article 19 of the Minister of Home Affairs Regulation Number 11 of 2026. This policy is also said to be in line with Presidential Regulation Number 79 of 2023 on Amendments to Presidential Regulation Number 55 of 2019 on the Acceleration of the Battery-Based Electric Motor Vehicle Programme for Road Transportation.
In its implementation, the Ministry of Home Affairs requests governors to report the provision of fiscal incentives by attaching the Governor’s Decree to the Ministry of Home Affairs through the Directorate General of Regional Financial Training most late on 31 May 2026.
Previously, through the Minister of Home Affairs Regulation Number 7 of 2025 on the Basis for Imposition of Motor Vehicle Tax, BBNKB, and Heavy Equipment Tax for 2025, the government excluded electric-based vehicles from the PKB object. This relief was implemented to attract consumers so that the use of renewable energy-based vehicles would increase.
However, in the latest regulation, namely the Minister of Home Affairs Regulation Number 11 of 2026, electric vehicle taxes are no longer Rp 0 and are not excluded from the PKB and BBNKB objects. Therefore, the Minister of Home Affairs has devised a strategy by issuing instructions for regions to provide incentives, so that electric vehicle users remain exempt from taxes.