Indonesia Postpones Carbon Tax Enactment to July 2022

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, said that the carbon tax collection, which was originally planned to start on April 1, 2022, will be postponed to July 2022.

"We see the space to postpone the implementation of the carbon tax, originally from April 1, 2022, we will postpone it to July 2022," said Febrio Kacaribu at the Press Conference of the APBN KiTa which was monitored in Jakarta, Monday, March 28, 2022.

The government was delaying tax collection because the government has to draft laws and regulations following Law Number 7 of 2021 concerning Harmonization of Tax Regulations (HPP) and Presidential Regulation Number 98 of 2021 concerning Implementation of Carbon Economic Values. "In this Presidential Regulation there are also regulatory points regarding the carbon market and we want to connect the two consistently with one another so that the laws and regulations are more comprehensive," said Kacaribu.

On the other hand, the government is also focusing on meeting the needs of the community to maintain purchasing power ahead of Ramadan and Eid. Moreover, currently, geopolitical conditions, especially the conflict between Russia and Ukraine, have indirectly raised world commodity prices which have an impact on prices for consumers.

"We will ensure that supply is maintained so that prices and people's purchasing power, especially in the face of Ramadan and Eid are maintained. Our focus is ensuring welfare and purchasing power," he said.

The implementation of the carbon tax is expected to complement a series of Indonesian policies to control climate change.