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Indonesia: High Tax Rate Hampers Electric Vehicles
TEMPO.CO, Jakarta – The electric car industry in Indonesia has not developed as it is mainly hampered by the high tax rate. According to I Gusti Putu Suryawirawan, Director General of metal industry, engineering, transportation, and electronics at the Industry Ministry, most electric vehicles are designed to be powered by four wheels. Indonesia charges taxes for four-wheel vehicles with luxury vehicle taxes.
Putu also explained that from several vehicle taxes that are enforced in Indonesia, the highest 30 percent rate is enforced for sedans which most electric vehicles are. Meanwhile, the lowest tax rate of 10 percent is enforced for multi-purpose vehicles (MPV).
“In 2030, Indonesia must reduce greenhouse gas emissions by 29 percent. This forces us to push the industry to produce electric vehicles,” said Putu. With a high tax rate, according to Putu, no company would want to establish a factory in Indonesia.
The Indonesian government is currently pushing the automotive industry to produce electric vehicles and is said to be ready to provide incentives for companies that are not hesitant to start an electric vehicle project.
Source: https://en.tempo.co/read/news/2017/08/29/056904321/High-Tax-Rate-Hampers-Electric-Vehicles