The Indonesian government confirmed that it will continue to provide tax exemptions for battery electric vehicles (BEVs), reversing the Home Ministry Regulation No 11/2026 announced earlier in the year mandating that BEVs be subject to local taxation, according to local reports.
The decision to withdraw the new regulation, which covers the motor vehicle tax (PKB) and the vehicle ownership transfer tax (BBNKB), came after the Home Ministry came under fire from industry stakeholders for “undermining the country’s push over the last few years to encourage the adoption of BEVs."
The regulation was initially welcomed by many regional governments, as it meant increased tax revenues at a time of reduced central government fund transfers to regions.
BEV sales in the country more than doubled to over 36,700 units in the first quarter of 2026, accounting for almost 18% of total vehicle sales in the country, comprising mostly Chinese brands.
The Jakarta Provincial Governor, Pramono Anung, confirmed that the city will realign its policies regarding tax incentives for BEVs with central government directives.
