Indef Highlights Loopholes in Electric Vehicle Tax Avoidance
The Ministry of Home Affairs has granted authority to regional governments to collect taxes on electric vehicles through Ministry of Home Affairs Regulation Number 11 of 2026. Under this regulation, electric cars and motorcycles are no longer exempt from Motor Vehicle Tax (PKB) and Motor Vehicle Ownership Transfer Fee (BBNKB).
However, economist from the Institute for Development of Economics and Finance (Indef), Andry Satrio Nugroho, assesses that this policy requires review due to several issues. One of them is the potential conflict with Law Number 1 of 2022 on Central and Regional Financial Relations (HKPD), which in Article 7 states that renewable energy-based vehicles are excluded from PKB objects.
Furthermore, Andry views the delegation of authority to regional governments in determining tax rates as potentially creating loopholes for tax avoidance. This is because regional heads are given the authority to decide whether to impose taxes on electric vehicles or not.
He explains that this situation could encourage vehicle owners to register their vehicles in regions with lower tax rates or those still providing incentives, thus creating disparities between regions and reducing policy effectiveness.
“There is potential for tax payments in regions offering larger incentives. Therefore, in the future, a form of tax avoidance could emerge if there are regions that continue to levy taxes on electric vehicles,” said Andry.
The Director General of Regional Financial Development at the Ministry of Home Affairs, Agus Fatoni, has not responded to interview requests and questions sent via his mobile phone.
In the regions, West Java Governor Dedi Mulyadi states that he will continue to collect taxes from electric-based vehicles. According to him, motor vehicle tax remains one of the important sources of regional revenue.
Dedi assesses that the absence of motor vehicle tax—coupled with the potential delay in revenue-sharing funds—would make it difficult for regional governments to finance development. “My hope is that the tax remains for regional contributions. After all, motorcycles and cars use the roads,” he said on Monday, 20 April 2026.