Indonesia reduced the value-added tax on electric vehicles from 11% to 1% to attract overseas investment

According to news on April 3, in order to encourage promotion, the Indonesian government said on Monday that it would reduce the value-added tax on electric vehicles from 11% to 1% to attract investment in domestic production.

The incentive policy will come into effect this month and will last until the end of the year, the maritime and investment co-ordinating department said in a statement.

Some electric buses also enjoy VAT benefits, the statement said.

Indonesia is actively attracting investment to produce batteries and electric cars at home to take advantage of its rich nickel reserves. Nickel is an important raw material for battery production, which will help Indonesia develop new industries and promote economic growth.

Indonesian officials have been trying to attract investment from electric carmakers such as Tesla and Chinese BYD Motors.

South Korea's LG and Hyundai have begun building battery and electric car assembly plants in the Southeast Asian country.

Last month, Indonesia said it would allocate 700 billion rupiah ($466.7 million) of state funds to subsidize sales of electric motorcycles until 2024.