- The Head of the Fiscal Policy Agency at the Ministry of Finance ("Ministry"), Febrio Kacaribu, recently stated that the government would postpone the implementation of the new carbon tax, which was initially to be introduced in July 2022. Mr. Kacaribu revealed that currently, supporting regulations for the carbon tax are still being finalized by all of the relevant ministries/agencies, including the Ministry.
- The drafting of said regulations is taking account of various factors, including the development of carbon markets, the achievement of the Nationally Determined Contribution ("NDC") targets and sectoral readiness. The government is also aware that the current national economic climate is being overshadowed by global turmoil, and thus the new tax will require careful handling.
- Meanwhile, the improvement of the carbon market is also a necessary step given its significance in terms of achieving the NDC. Mr. Kacaribu said that the laws and regulations that relate to the carbon market would continue to be improved and would complement the implementation of the carbon tax.
- Finally, Mr. Kacaribu affirmed that the carbon tax was initially being targeted for introduction in relation to coal-fired power plants through a cap and tax mechanism commencing in 2022 as mandated under Law No. 7 of 2021 on the Harmonization of Tax Regulations. The government will also continue to ensure the implementation of the carbon tax in 2022 as a strategic policy driver that will be showcased during the upcoming G20 Summit. (ANT)
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