New EV Tax Rules Under Scrutiny, Experts Demand Government Clarity
JAKARTA – Electric vehicle incentive policies in Indonesia are beginning to undergo changes. After previously receiving various relief measures, including tax exemptions in several regions, battery electric vehicles (BEVs) are no longer fully tax-exempt.
This change coincides with the issuance of Ministry of Home Affairs Regulation Number 11 of 2026, which opens the door for the imposition of Motor Vehicle Tax (PKB) and Motor Vehicle Ownership Transfer Tax (BBNKB) on electric vehicles, with the rates left to the discretion of respective regional governments.
The policy has immediately sparked diverse responses from industry players and observers alike, all highlighting the importance of balancing market growth with regional revenue needs.
Vice Chairman of Market Development at Gaikindo, Jongkie D Sugiarto, stated that tax policies must be designed carefully to avoid impacting vehicle sales.
According to him, on one hand, regional governments do indeed need revenue for infrastructure development. However, tax policies must still consider balance to prevent negative effects on vehicle sales.
“We know that regional governments need funds to repair roads, build bridges, and so on. Meanwhile, central government funds are limited. But we must still maintain balance. Don’t just impose it because we need the money; if sales plummet drastically, what then?” he said.
On the other hand, automotive expert from Bandung Institute of Technology, Yannes Martinus Pasaribu, views the policy as fundamentally not misguided.
“This policy ideally should be accompanied by clear technical guidelines, not left to the regions without direction, because uncertainty is precisely what is dangerous for the market, industry players, and its business ecosystem,” said Yannes.
According to him, the lack of clarity in regulations is the most disruptive factor to market psychology, especially for consumers considering purchasing electric vehicles.
“Consumers who were about to buy an EV now hold off, afraid that if they buy now, the tax might change significantly next month,” he said.
Not only consumers, but the impact is also felt by business actors in the automotive sector. Dealers are said to struggle in providing price certainty to potential buyers, while manufacturers face challenges in formulating sales strategies.
Furthermore, he assesses that this situation could be exploited by other countries to attract electric vehicle industry investments. Countries like Malaysia and Thailand are seen as having opportunities to offer more attractive regulatory certainty to investors.
Therefore, Yannes believes the government needs to promptly take coordinated steps across ministries so that the resulting policies are clearer and more consistent.
He emphasised that the current situation is not merely about changes in tax figures, but concerns policy certainty, which is a crucial factor in developing the electric vehicle ecosystem in Indonesia.
“This critical situation is not just about ups and downs in tax numbers, but the loss of national certainty that has been the main attraction of EVs in Indonesia,” he said.