As consumers wait to hear word on whether the previous subsidy scheme would continue, the government is thinking of introducting a VAT waiver for new purchases of electric motorbikes.
he government is planning to rescind the subsidy for purchases of new electric motorbikes, but is mulling over replacing it with a tax incentive in its bid to boost the adoption of battery-powered two-wheeled vehicles, according to the Industry Ministry.
Under the previous scheme that ended on Dec. 31 last year, consumers were eligible for a Rp 7 million (US$429) subsidy to purchase new electric motorbikes as well as a Rp 5 million subsidy to convert fossil fuel motorbikes to electric.
The government is now considering a new scheme that waives value-added tax (VAT) for purchases of new electric two-wheelers, similar to a policy introduced for four-wheelers.
“Even if there are incentives, they will not be the same as the one offered last year or in 2023. Perhaps the scheme will be different, not [in the form of] subsidies anymore,” he said in Jakarta on Tuesday, as quoted by detikFinance.
“Maybe we will provide incentives through tax waivers. We are in the process of submitting the proposal.”
Read also: Govt misses EV two-wheeler subsidy target by huge margin
The government earmarked a total subsidy of Rp 350 billion for 50,000 new electric motorbike purchases in 2024, much lower than the Rp 1.4 trillion subsidy allocation in 2023.
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