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Low-emissions incentive to boost electric car development: Minister
The proposed incentive bases the luxury tax on how much carbon dioxide a vehicle produces, and not on engine capacity.
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Trade Minister Airlangga Hartarto climbs out of a vehicle on March 1 at the Gaikindo Indonesia International Commercial Vehicle Expo (GIICOMVEX) 2018 in Jakarta. (Antara/Audy Alwi)
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n its effort to boost the development of electric cars, the government is soon to issue a regulation for electric car owners to receive low-emission incentives on their luxury tax (PPnBM).
Industry Minister Airlangga Hartarto said in Jakarta on Monday that the proposed changes to the luxury tax scheme would determine a tax rate of between 0 to 30 percent based on a vehicle's carbon dioxide (CO2) emissions.
The proposed incentive would apply to affordable energy-saving vehicles (KBH2s), hybrid electric vehicles (HEVs), plug-in HEVs, flexible-fuel vehicles (FFVs) and electric vehicles.
“If we use old PPnBM scheme, sedans would [not be competitive], while electric cars would receive no incentives,” Airlangga said as quoted by kontan.co.id. He added that electric cars not only produced lower emissions, but also offered lower operational costs.
The current PPnBM scheme, whose rates reach up to 125 percent, is based on engine capacity, while the new regulation proposes basing the tax rate on a vehicle's CO2 emission.
Airlangga said the development of low-emission vehicles was in line with the Paris Agreement on climate change. With the new tax scheme, the government expected to meet its targeted 20 percent market share for electric car sales by 2025.
Indonesian Automotive Industry Association (Gaikindo) chairman Jongkie Sugiarto welcomed the government's proposed luxury tax scheme. He declined to comment further on the matter, saying that he had not received detailed information about the new scheme.
“We have to wait for the government's decision,” Jongkie said, although he expressed hope that the new incentive policy would help drive the national development of electric cars. (bbn).
