Official! Government Postpones Carbon Tax Implementing July 1, 2022

Illustration (Photo: Doc. Antara)

JAKARTA – The government through the Ministry of Finance confirmed that the planned implementation of the carbon tax from 1 July 2022 will be postponed. This was conveyed directly by the Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, in his presentation on the realization of the May 2022 edition of the State Budget.

"The government is considering reviewing the implementation of the carbon tax in July 2022," he said through an online channel when answering reporters' questions on Thursday, June 23.

According to Febrio, this was taken by considering all existing aspects, including the development of the carbon market, the achievement of the national determination target, the readiness of other sectors, as well as economic conditions.

"Currently, regulations supporting the carbon tax are still being finalized by all ministries and institutions, including the Ministry of Finance," he said.

For information, Indonesia is still committed to realizing a 29 percent reduction in carbon emissions by 2030 with its own efforts and 41 percent with international assistance. The imposition of the carbon tax levy itself will target coal power plants for the first time.

"The carbon tax is still targeted to be imposed for the first time on new coal-fired power plants with a cap and tax mechanism starting in 2022 according to the mandate of the HPP Law (Harmonization of Tax Regulations). This will support the carbon market mechanism that is implemented with the cap and trade that has taken place between the PLTUs carried out by the Ministry of Energy and Mineral Resources, "explained Sri Mulyani's subordinate.

"The government continues to make the implementation of the carbon tax in 2022 as a strategic policy driver that will be a showcase at the G20 high-level meeting later. This showcase also encourages other climate change mitigation actions, such as the energy transition mechanism, which on the one hand is to retire coal-fired power plants early and accelerate new and renewable power plants," closed Febrio.