automotive

The Automotive Industry Will Receive Tax Incentives Throughout 2025

The Deputy Minister of Industry, Faisol Riza, has confirmed that tax incentives for the automotive industry will be in effect for a full year starting in 2025. This announcement reinforces the information regarding automotive industry incentives presented by Finance Minister Sri Mulyani during a press conference on the Economic Policy Package held on Monday, December 16, 2024. 

"Yes, the policy will be effective for one year," Faisol stated when approached at the Ministry of Industry office in South Jakarta on Tuesday, December 17, 2024. He further mentioned that the government plans to evaluate the effectiveness of this policy after it has been implemented for one year. 

Previously, Finance Minister Sri Mulyani Indrawati announced an economic policy package that includes stimulus measures for both the public and industries. This stimulus policy will take effect on January 1, 2025, coinciding with an increase in the value-added tax (VAT) to 12 percent. One of the primary targets of this policy is the automotive sector. 

Minister of Industry Agus Gumiwang Kartasasmita explained that this policy reflects the government's concern for the automotive sector, which is currently facing challenges due to declining purchasing power among consumers. Agus expressed hope that this initiative would invigorate the domestic automotive industry amid the implementation of the VAT increase. 

The government has introduced four incentive policies for the automotive industry. The first is a value-added tax incentive borne by the government (VAT DTP) for electric vehicles (EVs), which includes a 10 percent incentive for the delivery of certain four-wheeled EVs and certain EV buses with a minimum local content level of 40 percent, as well as a 5 percent incentive for the delivery of certain EV buses with a local content level between 20 percent and less than 40 percent. 

Tag: Automotive Industry Faisol Riza Sri Mulyani Indrawati