Jakarta's EV Tax Exemption Leads to Rp 2 Trillion Revenue Loss, Citizen Burden Concerns Rise

The Jakarta provincial government continues to provide exemptions for electric vehicles (EVs) from motor vehicle tax (PKB) and vehicle name transfer tax (BBNKB). This preferential policy, while encouraging EV adoption, has significantly impacted the government's revenue, with potential losses estimated at up to Rp 2 trillion. According to Lusiana Herawati, head of the Jakarta Provincial Revenue Agency (Bapenda), the growth of EVs in the capital has been substantial, reaching 33 percent by the end of the second quarter of 2026. However, despite this significant growth, the government is not collecting taxes on these vehicles due to the ongoing exemption. "The potential loss of revenue from PKB and BBNKB amounts to Rp 515 billion for PKB (on 109,172 vehicles) and Rp 1.5 trillion for BBNKB (on 53,419 vehicles). This is based on EV sales in Jakarta up to June 2026," Lusiana stated during a 'Jakarta Budget Talks: Q2 2026 APBD Realization' broadcast by the Jakarta provincial government on Wednesday (22/7/2026). Furthermore, it was revealed that approximately 63 percent of all EVs in Indonesia are located in Jakarta, and 78 percent of their owners already possess multiple vehicles. Considering this situation, Lusiana commented, "From an equity perspective, this policy, in coordination with the central government, may need to be reviewed." Previously, taxation on EVs was considered in line with Ministerial Regulation No. 11/2026 concerning the Basis for Imposing Motor Vehicle Tax, BBNKB, and Heavy Equipment Tax. In this regulation, EVs were no longer included in the category of vehicles exempted from PKB and BBNKB. This was further reinforced by Article 19 of Ministerial Regulation No. 11/2026, which stated that the imposition of PKB and BBNKB on new battery-based electric vehicles manufactured before 2026 would be given incentives in the form of exemption or reduction. The wording "incentives of exemption or reduction of PKB and BBNKB are given" in the latest regulation indicated that EVs are not automatically free from vehicle tax. This means that the provision of exemption or reduction incentives is adjusted according to local government policies. However, a circular from the Minister of Home Affairs (No. 900.1.13.1/3764/SJ) concerning the Provision of Fiscal Incentives in the Form of Exemption of Motor Vehicle Tax and Motor Vehicle Name Transfer Tax for Battery-Based Electric Vehicles requested regional governments to continue providing incentives in the form of tax exemptions for electric vehicles. Consequently, the Jakarta provincial government continues to exempt taxes on electric cars to date.