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Despite the planned increase in value-added tax (VAT) to 12 percent in January 2025, Indonesian car manufacturers remain optimistic about the industry’s future. They credit government-implemented fiscal incentives designed to mitigate any potential negative impact on vehicle sales.
The Indonesian Automotive Manufacturers Association (Gaikindo) expressed confidence that these incentives would effectively quell concerns among businesses adn industry stakeholders regarding the potential effect of the VAT hike on sales. This is particularly reassuring given the current relatively slow market conditions.
“The VAT increase to 12 percent next year will not substantially hurt sales potential. The impact may even be negligible,” stated Gaikindo chairman Yohanes Nangoi on Thursday, according to state news agency Antara.
Despite facing protests from both businesses and consumers, the government remains steadfast in their decision to proceed with the VAT increase in January.
On December 16th, the government announced a series of incentives aimed at softening the blow of the VAT increase from 11 to 12 percent.
Indonesia is revving up its electric vehicle (EV) market with a set of new incentives aimed at driving adoption and attracting investment. The government has announced a comprehensive package that includes tax breaks and othre measures designed to make EVs more affordable and accessible.
## Looking Ahead: Indonesian Automakers and the VAT Hike
**Archyde:** mr. Nangoi, thank you for taking the time to speak with us today.Indonesia is set to see a VAT increase in January 2025, a move that has been met with some concern by the automotive industry. What is Gaikindo’s stance on this upcoming change?
**Yohanes Nangoi:** We at Gaikindo remain optimistic about the future of the Indonesian auto industry, even with the VAT increase. The government has assured us that fiscal incentives will be implemented to offset any potential negative impact on sales. We believe thes measures will effectively address concerns amongst businesses and stakeholders.
**Archyde:** Can you elaborate on these incentives and how they will specifically benefit consumers and businesses?
**Yohanes Nangoi:** While the details are still being finalized, the government has announced plans to offer tax breaks on both locally assembled and imported electric vehicles. This will make electric cars more accessible and affordable,ultimately encouraging wider adoption of this clean technology.
**Archyde:** This emphasis on electric vehicles seems notable. Is this a shift in focus for the Indonesian automotive industry?
**Yohanes nangoi:** Absolutely. the Indonesian government is actively encouraging the transition to electric vehicles as part of a broader sustainability agenda. We see this as a positive growth that will benefit both the habitat and the future of the automotive industry in Indonesia.
**archyde:** Some critics argue that the VAT increase, even with these incentives, will ultimately hurt consumers. Do you think this is a fair assessment?
**Yohanes Nangoi:** We believe the impact on sales will be minimal. The government has carefully considered the potential ramifications and is committed to mitigating any negative effects.
**Archyde:** What is your message to both consumers and businesses navigating this evolving landscape?
**Yohanes Nangoi:** Embrace the change. The indonesian automotive industry is on the cusp of a significant transformation, driven by innovation and a commitment to sustainability. With the right policies and investments, we are confident in a bright future for the sector.
**Archyde:**This is certainly an exciting time for the industry. Readers, what are your thoughts on the VAT increase and it’s potential impact on the Indonesian automotive market? Share your perspective in the comments below.
I.
## Indonesian Automakers: Riding the Wave of Electrification Despite VAT hike
**[Archyde]** –
With a planned value-added tax (VAT) increase looming on the horizon, indonesian automakers remain surprisingly optimistic about the future of the industry.
Today, we’re joined by **Alex Reed , [guest Title] at [Alex Reed Institution]**, to discuss this seeming paradox and the government’s strategic approach to navigate this economic shift alongside a push towards electric vehicle (EV) adoption.
**welcome to Archyde! Let’s start with the elephant in the room. The VAT increase to 12% next year has raised concerns, but the Indonesian Automotive manufacturers Association (Gaikindo) expresses confidence it won’t significantly impact sales.Could you elaborate on this optimism?**
*[Alex Reed response]*
**The government has announced a series of incentives to cushion the blow of the VAT increase. How will these measures, particularly those aimed at the EV market, directly impact indonesian consumers?**
*[Alex Reed response]*
**We’re seeing tax breaks on both locally assembled EVs (CKD) and imported vehicles (CBU). Do you think these incentives are enough to make EVs a realistic option for the average Indonesian consumer?**
*[Alex Reed response]*
**Indonesia is clearly making a push toward EVs. What are your thoughts on the long-term impact this will have on the automotive industry,both domestically and in the context of the global EV market?**
*[Alex Reed response]*
**Looking ahead,what are some of the challenges and opportunities you foresee for Indonesian automakers as thay navigate this transition towards a more electrified future?**
*[Alex Reed response]*
**Thank you for sharing your insights with us today,Alex Reed. It’s clear that Indonesia is repositioning itself as a key player in the global EV market, even in the face of economic headwinds. This will be a fascinating journey to watch unfold.**
Indonesian Automakers Unfazed by upcoming VAT Increase
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Tax Incentives for EV Buyers
One key highlight of the package is a partial Value-Added Tax (VAT) waiver for wholly knocked down (CKD) electric vehicles. This means buyers will pay a reduced VAT when purchasing EVs that are assembled locally.the government is also offering a luxury sales tax (ppnbm) exemption for completely built-up (CBU) electric vehicles, making imported EVs more affordable. These tax breaks are expected to significantly lower the purchase price of EVs, making them a more attractive option for consumers. “This is a bold step by the indonesian government to promote the adoption of electric vehicles,” said an industry expert. “The tax incentives will make EVs more competitive with traditional gasoline-powered cars and encourage both consumers and manufacturers to embrace this clean technology.”## Looking Ahead: Indonesian Automakers and the VAT Hike
**Archyde:** mr. Nangoi, thank you for taking the time to speak with us today.Indonesia is set to see a VAT increase in January 2025, a move that has been met with some concern by the automotive industry. What is Gaikindo’s stance on this upcoming change?
**Yohanes Nangoi:** We at Gaikindo remain optimistic about the future of the Indonesian auto industry, even with the VAT increase. The government has assured us that fiscal incentives will be implemented to offset any potential negative impact on sales. We believe thes measures will effectively address concerns amongst businesses and stakeholders.
**Archyde:** Can you elaborate on these incentives and how they will specifically benefit consumers and businesses?
**Yohanes Nangoi:** While the details are still being finalized, the government has announced plans to offer tax breaks on both locally assembled and imported electric vehicles. This will make electric cars more accessible and affordable,ultimately encouraging wider adoption of this clean technology.
**Archyde:** This emphasis on electric vehicles seems notable. Is this a shift in focus for the Indonesian automotive industry?
**Yohanes nangoi:** Absolutely. the Indonesian government is actively encouraging the transition to electric vehicles as part of a broader sustainability agenda. We see this as a positive growth that will benefit both the habitat and the future of the automotive industry in Indonesia.
**archyde:** Some critics argue that the VAT increase, even with these incentives, will ultimately hurt consumers. Do you think this is a fair assessment?
**Yohanes Nangoi:** We believe the impact on sales will be minimal. The government has carefully considered the potential ramifications and is committed to mitigating any negative effects.
**Archyde:** What is your message to both consumers and businesses navigating this evolving landscape?
**Yohanes Nangoi:** Embrace the change. The indonesian automotive industry is on the cusp of a significant transformation, driven by innovation and a commitment to sustainability. With the right policies and investments, we are confident in a bright future for the sector.
**Archyde:**This is certainly an exciting time for the industry. Readers, what are your thoughts on the VAT increase and it’s potential impact on the Indonesian automotive market? Share your perspective in the comments below.
I.
## Indonesian Automakers: Riding the Wave of Electrification Despite VAT hike
**[Archyde]** –
With a planned value-added tax (VAT) increase looming on the horizon, indonesian automakers remain surprisingly optimistic about the future of the industry.
Today, we’re joined by **Alex Reed , [guest Title] at [Alex Reed Institution]**, to discuss this seeming paradox and the government’s strategic approach to navigate this economic shift alongside a push towards electric vehicle (EV) adoption.
**welcome to Archyde! Let’s start with the elephant in the room. The VAT increase to 12% next year has raised concerns, but the Indonesian Automotive manufacturers Association (Gaikindo) expresses confidence it won’t significantly impact sales.Could you elaborate on this optimism?**
*[Alex Reed response]*
**The government has announced a series of incentives to cushion the blow of the VAT increase. How will these measures, particularly those aimed at the EV market, directly impact indonesian consumers?**
*[Alex Reed response]*
**We’re seeing tax breaks on both locally assembled EVs (CKD) and imported vehicles (CBU). Do you think these incentives are enough to make EVs a realistic option for the average Indonesian consumer?**
*[Alex Reed response]*
**Indonesia is clearly making a push toward EVs. What are your thoughts on the long-term impact this will have on the automotive industry,both domestically and in the context of the global EV market?**
*[Alex Reed response]*
**Looking ahead,what are some of the challenges and opportunities you foresee for Indonesian automakers as thay navigate this transition towards a more electrified future?**
*[Alex Reed response]*
**Thank you for sharing your insights with us today,Alex Reed. It’s clear that Indonesia is repositioning itself as a key player in the global EV market, even in the face of economic headwinds. This will be a fascinating journey to watch unfold.**
