Automotive - 0% VAT on EV and hybrid incentives has not yet been signed

Automotive - 0% VAT on EV and hybrid incentives has not yet been signed The government still has a number of homework that must be completed regarding regulations for electric vehicles towards the end of 2023. Entering the last month, there is no certainty about the issuance of regulations related to the rules for eliminating the 0% value added tax (VAT) for imports of electric cars, easing the rate Domestic Component (TKDN) 40% to 2026, as well as incentives for hybrid cars. According to the Ministry of Industry, the regulations regarding the 0% VAT incentive for importing electric cars as a whole or CBU are still being discussed by the relevant Ministry. Meanwhile, regarding to the relaxation of TKDN by at least 40% which should be from 2024 to 2026 was also still in the process of synchronization and harmonization in the Regulation of the Minister of Industry (Permenperin). (Source: Bisnis Indonesia). Comment: Effort to developing EV and its supported ecosystem has been so intense. Despite we are confident Indonesia potential EV sector development, we also view that it is likely would not happen in the near term. We expect to witness the conversion and lifestyle changes to be smoother by the time price of EV car become more affordable and supporting infrastructure such as charging station has been well prepared.