Indonesia considering carbon tax regulations in 2022

The Ministry of Finance of Indonesia is currently considering amending Law No. 6 of 1983 on the General Provisions and Taxation Procedures (RUU KRP) and introducing a carbon tax in 2022. On July 12, 2021, Hariyadi Sukamdani, the chairman of “Asosiasi Pengusaha Indonesia” (APINDO), said on the Market Review IDX Channel that the introduction of a carbon tax at this time was not appropriate. The coal industry also wants to postpone the introduction of the carbon tax. The government of Indonesia and APINDO will continue to discuss and make further adjustments.

Appearing on the Market Review IDX Channel, Hariyadi Sukamdani expressed his opposition to the carbon tax and indicated three important points regarding the debate on its adoption. First, he pointed out that it was important to clarify the national interests in introducing the carbon tax. He also said that considering the energy mix by 2045 which had been planned by the Ministry of Energy and Mineral Resources, 70% of power plants would be still using coal, which meant that the country is not fully prepared to introduce the carbon tax. In addition, for the tax amount of 75,000 rupiah per ton of emissions, he pointed out that the basis for its calculation was unclear.

“Asosiasi Pertambangan Batubara Indonesia” (APBI) also hopes that the discussion on the adoption of the carbon tax in RUU KUP will be postponed. Since the carbon tax has a significant impact on the domestic industry, Hendra Sinadia, Secretary General of APBI, believes that a detailed discussion involving businesses of industrial sectors that emit carbon dioxide is necessary for its introduction.

Reference:
https://www.idxchannel.com/economics/apindo-sebut-wacana-pajak-karbon-tidak-relevan
https://ekonomi.bisnis.com/read/20210712/44/1416485/pengusaha-batu-bara-ingin-pembahasan-pajak-karbon-ditunda