Carbon Tax Implementation; Finance Ministry Awaits for Economy Condition
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22 October 2022 21:22 WIB
TEMPO.CO, Jakarta - Indonesian Finance Ministry will apply carbon tax by considering the right moment. It has previously been delayed twice in April and in July 2022.
“We continue to pay attention to the high uncertainty, both from the global economy, and the impact of collecting carbon taxes on our economy," said the head of fiscal policy at the Finance Ministry, Febrio Kacaribu, in APBN KiTA press conference on Friday, October 21.
Febrio said the carbon tax collection is being set to achieve the National Determined Contribution (NDC) target. Indonesia is committed to reducing carbon emissions and increasing the energy mix from 29 percent to 31.9 percent.
The target would be achieved once the carbon tax is implemented. “We're preparing carbon tax in the context of our achievement of NDC target and climate change risk. On another side, we prepare carbon market mechanism that can be combined effectively with the carbon tax," said Febrio.
Meanwhile, a research director at the Institute for Development of Economics and Finance (Indef), Berly Martawardaya, questioned the government's serious commitment to implementing the carbon tax. It is stipulated in Law Number 7/2021 regarding the Harmonization of Tax Regulations (UU HPP), which should take effect on April 1, 2022.
“[Are they] serious or not, especially as the G20 Presidency, one of which discusses the energy transition, which has been promulgated postponed,” he said, last August 18.
According to Berly, carbon tax implementation is about credibility. He hopes that the credibility of the G20 initiative would not be tarnished due to the unimplemented one of Indonesia's promises, which is reducing carbon emissions. "Well, indeed the government has the initiative to implement carbon tax even though the value is small. But, this is already small, and it has been postponed," he remarked.
ANTARA | KHORRY ALFARIZI
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