Chery Responds to Government's Plan to Relax TKDN Policy

Regarding the impact of relaxing TKDN, Chery believes the government's decision will still consider various parties. 

“It could be that TKDN is relaxed, but then the government provides certain incentives. But it's still too early to comment,” Budi affirmed.

TKDN is one of the important factors that manufacturers, especially of electric and hybrid cars, must meet if they want to obtain tax incentives.

Specifically for electric cars or BEVs (Battery Electric Vehicles), a 10 percent VAT (Value Added Tax) reduction is applied, while for HEVs (Hybrid Electric Vehicles) it is three percent.

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The minimum TKDN that BEVs and HEVs must have to enjoy subsidies is 40 percent. This policy is valid until the end of 2025.

Then there are also incentives for manufacturers who are still importing vehicles, on the condition of an investment commitment and producing a quantity equal to the number imported into the country.

Several brands that enjoy this incentive scheme are BYD (Build Your Dreams) and Citroen.

The President's Reason for Wanting to Relax TKDN

On a separate occasion some time ago, President Prabowo Subianto was looking for ways to anticipate the negative impact of the latest import tariff rules from the President of the United States, Donald Trump.

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According to Prabowo, forced TKDN regulations make the Indonesian market uncompetitive. So it needs to be made more flexible.

He also wants to deregulate or abolish policies if they are no longer effective.

“Please, my assistants, my ministers, be realistic. Just make the TKDN realistic,” said the President.