Implementing the Carbon Tax on July 1, 2022, the Indonesian Government is preparing the technical rules for its implementation. The Ministry of Finance is currently drafting various technical rules for implementing the carbon tax, which the Cabon Tax will implement on July 1, 2022.
The Government will apply a carbon tax when the regulation and readiness of the electricity sector, as the first sector to be subject to a carbon tax, is more ready. “This readiness is important so that the core goal of implementing the carbon tax has an optimal impact so that the Government decides on implementing the carbon tax on July 1, 2022. The Government will continue to consult with the DPR in preparing the implementation of this carbon tax,” said the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, in its release yesterday.
The technical rules for implementing the carbon tax include tariffs and the basis for imposition, methods for calculating, collecting, paying or depositing, reporting, and a carbon tax roadmap. Meanwhile, other technical regulations, such as the Emission Upper Limit for the PLTU sub-sector and procedures for implementing the Carbon Economic Value in power plants, will be determined by the Ministry of Energy and Mineral Resources (ESDM).
Carbon Economy at the Coordinating Ministry for Maritime Affairs and Investment. For climate control instruments to run optimally, the Government is also preparing various derivative regulations from Presidential Regulation 98/2021, including those related to the implementation of Carbon Economic Values (NEK) and Nationally Determined Contributions (NDC) at the Ministry of Environment (KLHK) and the Value Steering Committee. “The climate issue is a cross-sectoral issue. We will continue to maintain and strengthen coordination so that regulations that complement each other can optimize the Government’s efforts to control climate change,” said Febrio.
Febrio explained that regulations related to carbon taxes were strengthened by ratifying Law Number 7 of 2021 concerning the Harmonization of Tax Regulations (UU HPP). The primary purpose of imposing a carbon tax is to increase state budget revenues and as an instrument of climate control in achieving sustainable economic growth according to the polluter pays principle.
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He said the imposition of a carbon tax is expected to change the behavior of economic actors to switch to low-carbon green economic activities. On the other hand, compiling a carbon tax roadmap or roadmap needs to pay attention to the carbon market roadmap. The carbon tax roadmap will include a strategy for reducing carbon emissions in the NDC, priority sector targets, alignment with new and renewable energy development, and alignment with other regulations.
According to Febrio, in its implementation, the Government will pay attention to the proper transition so that the implementation of this carbon tax remains consistent with the momentum of post-pandemic economic recovery. The imposition of a carbon tax will be carried out in stages by considering the priorities in achieving the NDC target, the development of the carbon market, the readiness of the sector, and the condition of the Indonesian economy. The goal is that the imposition of a carbon tax that applies in Indonesia can meet the principles of justice (just) and affordable (affordable) and still prioritize the community’s interests.
Source : EGINDO.co