The Carbon Tax will be implemented at the end of 2022 after being postponed twice due to global and domestic economic conditions so it must be postponed. This was revealed from a statement by the Head of the Financial Sector Policy Center at the Fiscal Policy Agency of the Ministry of Finance (Kemenkeu) Adi Budiarso as reported by Antara Tuesday (9/8/2022) quoted by EGINDO.co
According to him, the implementation of the carbon tax in Indonesia has been temporarily postponed due to global economic uncertainty. However, the government continues to formulate the necessary regulations to implement the carbon tax, “We continue to monitor global and domestic economic conditions to see the right moment,” said Adi.
For this reason, he said, the carbon pricing instrument which is part of a comprehensive policy package for climate change mitigation was ratified by the Law on the Harmonization of Tax Regulations (HPP) last year.
The implementation of the carbon tax in Indonesia uses a cap and tax scheme, where a tariff of Rp. 30 per kilogram of carbon dioxide is set, equivalent to being applied to the amount of emissions that exceed the stipulated cap. The HPP Law is the first basis for the implementation of a carbon tax in Indonesia, in addition to a number of other regulations which are the Carbon Tax regulation as a derivative regulation of the HPP Law.
Meanwhile, the technical rules for implementing the carbon tax include tariffs and the basis for imposition, methods for calculating, collecting, paying or depositing, reporting, as well as 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).
In the mechanism of imposing a carbon tax in Indonesia, taxpayers can take advantage of carbon certificates purchased on the carbon market as a reduction in their carbon tax obligations, most of the carbon tax is in the form of excise, either as a source of general revenue or allocated for specific purposes.
The carbon tax has three objectives, firstly, changing the behavior of economic actors from high-carbon green economy activities to low-carbon ones. Second, support the target of reducing greenhouse gas (GHG) emissions in the medium and long term. Third, encourage the development of carbon markets, technological innovations, and investments that are more efficient, low-carbon, and environmentally friendly.
Source: EGINDO.Co