Antara, Jakarta – The government is weighing the reintroduction of tax incentives for purchasing electric vehicles and houses to support the middle class, Chief Economic Minister Airlangga Hartarto announced on Sunday.
These incentives were initially introduced during the administration of President Joko Widodo, when Airlangga also served as the economic minister.
Under the previous program, house purchases valued up to Rp 2 billion ($126,794) were exempt from value-added tax (VAT), while imported electric cars were duty-free to keep prices affordable. Additionally, a subsidy of Rp 7 million ($443) was provided for the purchase of electric motorcycles.
Airlangga indicated that his office is proposing the reinstatement of these measures in response to the recent decline in purchasing power.
"VAT relief and similar incentives are essential for the middle class, who rely on homes and vehicles to facilitate their work and mobility. Therefore, we are advocating for the reimplementation of these incentives," Airlangga said during an event in Jakarta.
He said strengthening consumer purchasing power is vital for boosting domestic consumption and driving economic growth.
The proposal is currently being discussed with the Finance Ministry. Since President Prabowo Subianto took office on October 20, the Finance Ministry has been operating independently from Airlangga's office. Finance Minister Sri Mulyani Indrawati now reports directly to the president.