Indonesia Indonesia to impose carbon tax on any goods and activities related to GHG emission

Indonesia to impose carbon tax on any goods and activities related to GHG emission

The Law  No. 7 of 2021 on Harmonization of Taxation System was enacted in Indonesia on October 29, 2021, and came into effect on the same day. Article 13 of the law stipulates a “carbon tax”, making it the first law in Indonesia to institutionalize carbon taxation regulations. Specifically, it stipulates the scope and the price of the carbon tax as well as the development of a carbon tax roadmap.

According to this law, the carbon tax will be imposed on “individuals or organizations that purchase carbon-containing goods or engage in activities that generate carbon emissions”. The timing of the taxation will be at the time of purchase for the former, and at the end of the year when the activity generates a certain amount of carbon emissions for the latter. The price of the carbon tax will be determined by taking into account the carbon market, but the law stipulates a minimum of IDR 30 per kilogram of carbon dioxide equivalent (CO2e). The details of the carbon tax calculation method, collection method, mechanism, etc. will be stipulated in a separate regulations by the Minister of Finance. Taxpayers who participate in carbon emissions trading, carbon offsetting, and other mechanisms that comply with environmental laws and regulations will be eligible for carbon tax reductions and other preferential treatment.

In addition, the law requires the government to prepare a carbon tax roadmap, which will outline the following points

  • Strategies to reduce carbon emissions
  • Priority areas to be targeted
  • Consistency with the development of new renewable energy sources


The original text of this law can be downloaded from:

Author / Responsibility

AOKI Kenji

Senior Consultant, EnviX Ltd.
General Director, E&H Consulting Co., Ltd.

Business Performance

Expertise in EHS (environment, health and safety) consulting in ASEAN region.
- Environmental regulations updating
- Chemical regulations consulting


MSc in Earth Science, The University of Tokyo

AOKI Kenji