Regulation of the Minister of Home Affairs Number 11 of 2026 Restructures Motor Vehicle Tax, Electric Vehicle Incentives, and Heavy Equipment Tax

Introduction 

On April 1, 2026, the Minister of Home Affairs issued Regulation of the Minister of Home Affairs Number 11 of 2026 on the Base for the Imposition of Motor Vehicle Tax, Motor Vehicle Transfer of Ownership Fee, and Heavy Equipment Tax ("Permendagri 11/2026"). Permendagri 11/2026 applies nationally as the basis for provincial governments in calculating, collecting, and determining annual tax rates and transfer of ownership fees. It also governs the tax imposition base for private vehicles, public transport, and waterborne vehicles, as well as the reporting of heavy equipment assets by businesses. In addition, it implements Article 9 paragraph (9) letter a, Article 14, and Article 19 paragraph (4) of Law Number 1 of 2022 on Financial Relations between the Central Government and Regional Governments.

Comparison

Permendagri 11/2026 repeals Regulation of the Minister of Home Affairs Number 7 of 2025 on the Base for the Imposition of Motor Vehicle Tax, Motor Vehicle Transfer of Ownership Fee, and Heavy Equipment Tax of 2025 ("Permendagri 7/2025"). The following is the comparison between Permendagri 11/2026 and Permendagri 7/2025:

Key Provisions

Determination of Motor Vehicle Weight and Coefficients 

The weight reflecting the degree of road damage and/or environmental pollution due to the use of Motor Vehicles is expressed in a coefficient as set forth in Article 17. A coefficient of 1 indicates an impact that remains within the tolerance limit, whereas a coefficient of more than 1 indicates an impact exceeding such limit. The weight is calculated based on:

1. Axle load differentiated by the number of axles, wheels, and vehicle weight;

2. Type of fuel, namely gasoline, diesel, or other fuels excluding renewable energy; and

3. Type, usage, year of manufacture, and engine characteristics based on cylinder capacity.

The coefficients are stipulated as follows:

1. 1 for three-wheeled passenger cars, three-wheeled goods vehicles, two-wheeled motorcycles, and three-wheeled motorcycles;

2. 1.025 for sedans;

3. 1.050 for jeeps and minibuses;

4. 1.085 for blind vans, pick-ups, box pick-ups, and microbuses;

5. 1.1 for buses;

6. 1.3 for light trucks and their equivalents; and

7. 1.4 for trucks and their equivalents.

For vehicles that have been operating for more than three years, the coefficient may be adjusted based on the fulfillment of emission quality standards, with further provisions stipulated in a Governor Regulation.

Exemptions for Vehicle Tax Objects 

Article 3 and Article 7 govern the types of vehicles exempted from Motor Vehicle Tax and Motor Vehicle Transfer of Ownership Fee. The exemptions apply to the ownership or transfer of:

1. Trains;

2. Vehicles for national defense and security;

3. Vehicles of embassies, consulates, foreign country representations under the principle of reciprocity, and international institutions;

4. Renewable energy-based Motor Vehicles.

This provision limits the granting of exemptions to such types of vehicles, unless stipulated otherwise in a Regional Regulation.

Registration Obligations and Separate Collection of Heavy Equipment Tax 

The ownership or control of heavy equipment is included as a tax object, with exemptions for heavy equipment owned by the government, regional governments, the Indonesian National Armed Forces/Indonesian National Police (TNI/Polri), as well as embassies and international institutions in accordance with the provisions set forth in Article 10. Taxpayers must register the tax objects with the provincial government through a registration letter. The registration must be submitted within the following periods:

1. 30 days since the ownership or control for new heavy equipment;

2. No later than the end of the tax period for previously owned heavy equipment;

3. 30 days since the arrival for heavy equipment originating from outside the region, as stipulated in Article 12.

The registration letter includes:

1. Type or brand;

2. Type or model;

3. Production number;

4. Year of manufacture;

5. Engine number;

6. Chassis number;

7. Proof of purchase transaction; and

8. Ownership document or lease agreement.

Heavy Equipment Tax is collected outside the one-stop integrated administration system for motor vehicles as stipulated in Article 13.

Tax Treatment for Electric Vehicles 

Battery-Based Electric Motor Vehicles are not subject to a 0% tax rate nationally. Tax incentives in the form of exemptions or reductions may still be granted in accordance with the provisions of laws and regulations, including for vehicles converted from fossil fuels to electric vehicles as stipulated in Article 19. The amount of such incentives follows the applicable policies, including provisions stipulated by the regional government where the vehicle is registered.

Tax Imposition for Public Transport 

The imposition of Motor Vehicle Tax for public transport of persons and goods is set at a maximum of 60% of the imposition base. For the Motor Vehicle Transfer of Ownership Fee, the imposition for public transport of persons is set at a maximum of 30%, while for public transport of goods it is set at a maximum of 60% as stipulated in Article 20.

Addition to the Selling Value for Vehicle Modification 

Vehicles undergoing modifications are subject to an additional Motor Vehicle Modification Selling Value. Modifications include, among others, changes to truck chassis, functional additions to goods vehicles, or changes to minibuses. The tax imposition base is calculated from the sum of the Motor Vehicle Selling Value and the Motor Vehicle Modification Selling Value as set forth in Article 16 and Article 26.

Exemptions of Transfer of Ownership Fee for Temporary Imported Vehicles 

Motor vehicles imported from abroad for temporary use in Indonesia are exempt from the Motor Vehicle Transfer of Ownership Fee if intended for:

1. Trade;

2. Re-export from the Indonesian customs area;

3. Exhibitions;

4. Research;

5. Samples; or

6. International standard sporting events, as stipulated in Article 6 paragraph (3).

Such exemption does not apply if the vehicle is not re-exported from the Indonesian customs area within a period of 12 consecutive months as set forth in Article 6 paragraph (4).

Tax Treatment in Free Trade Zones and Free Ports 

The tax calculation for motor vehicles and heavy equipment entering through free trade zones and free ports follows the provisions of laws and regulations. The Motor Vehicle Selling Value and the Heavy Equipment Selling Value as the tax imposition base are further governed through a Governor Regulation after obtaining the Minister's approval through the Director General of Regional Financial Development as stipulated in Article 25.

Updating the Imposition Base for New Vehicles 

Motor vehicles whose types, brands, models, and selling values have not been listed in the Annexes may still have their tax imposition base determined. The updating of such imposition base is stipulated by the Minister of Home Affairs and is valid until the determination for the following year. Its implementation is carried out by an updating team formed through a Ministerial Decree as set forth in Article 23 and Article 24.

Transitional Provisions 

The previously determined calculation base for the imposition of motor vehicle tax and heavy equipment tax is declared invalid since April 1, 2026. Governors shall adjust and stipulate the new calculation base no later than 15 (fifteen) Days since the date of promulgation as stipulated in Article 28. For motor vehicles and heavy equipment manufactured prior to 2026, their selling values are determined by the governor by taking depreciation into account as set forth in Article 27.

Closing 

Permendagri 11/2026 governs the imposition base of the Motor Vehicle Tax, Motor Vehicle Transfer of Ownership Fee, and Heavy Equipment Tax for the 2026 fiscal year, including calculations based on the Motor Vehicle Selling Value and coefficients accounting for vehicle type, fuel, and impact on roads and the environment. This regulation also encompasses incentives for Battery-Based Electric Motor Vehicles granted in accordance with applicable provisions, the tax imposition on heavy equipment with registration obligations to the provincial government outside the motor vehicle administration system, as well as limitations on tax-exempt objects. Furthermore, vehicles undergoing modifications are subject to an additional Motor Vehicle Modification Selling Value, public transport is subject to specific maximum rates, and specific provisions exist for temporarily imported vehicles and vehicles entering through free trade zones and free ports. For vehicles not yet listed in the Annexes, their tax imposition base is determined through an update by the Minister of Home Affairs, whereas for vehicles and heavy equipment prior to 2026, their selling values are determined by the governor considering depreciation. The previously applicable calculation base is declared invalid since April 1, 2026, and governors stipulate the new calculation base no later than 15 (fifteen) Days since the promulgation of this Ministerial Regulation, with further implementation carried out in accordance with provisions stipulated by the regional governments within their authority.