Jakarta, INTI - Tito Karnavian has urged all governors across Indonesia to provide fiscal incentives in the form of tax exemptions for electric vehicles (EVs), aiming to improve energy efficiency and reduce emissions.
Official Directive Through Circular Letter
The policy is outlined in Circular Letter No. 900.1.13.1/3764/SJ, signed on April 22, 2026.
In the directive, Tito called for the provision of incentives in the form of exemptions or reductions in regional taxes, including Motor Vehicle Tax (PKB) and Vehicle Ownership Transfer Fees (BBNKB) for battery-based electric vehicles, as well as vehicles converted from fossil fuels to electric power.
This policy follows the implementation of Presidential Regulation No. 79 of 2023 and Minister of Home Affairs Regulation No. 11 of 2026, both aimed at accelerating the adoption of battery-based electric vehicles.
Advancing Clean Energy and Economic Stability
The Minister emphasized that the initiative is designed to enhance energy efficiency, strengthen energy security, and promote environmentally friendly transportation.
The policy also takes into account global dynamics affecting the price and availability of fossil fuels.
Governors are required to report the implementation of these fiscal incentives to the Ministry of Home Affairs by May 31, 2026.
Provisions for vehicles manufactured in 2026 and earlier are also regulated under Article 19 of Ministerial Regulation No. 11 of 2026.
Conclusion
The proposed tax exemptions for electric vehicles reflect Indonesia’s strategic push toward cleaner energy and sustainable transportation. By reducing financial barriers, the government aims to accelerate EV adoption, strengthen energy security, and respond to global shifts in fossil fuel dynamics while supporting long-term economic stability.
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