YOGYAKARTA - Have you heard the term carbon pad? So, do you know what a carbon tax is?
Quoting from several media, the carbon tax or carbon emission tax (carbon tax), is a tax imposed on fuel consumption sourced from its carbon content. Hydrocarbon fuels (including petroleum, natural gas, and coal) have carbon elements that will become carbon dioxide (CO2) and other compounds when burned. Meanwhile, referring to the IBFD International Tax Glossary ( 2015), carbon tax is a tax imposed on fossil fuels.
Until in a simple sentence, the implementation of carbon tax will collect taxes from the use of this fuel.
From the environmental aspect, CO2 is a greenhouse gas that emits heat on earth and causes global warming. Therefore, the implementation of this carbon tax can be used to contribute to the emissions of greenhouse gases caused by the fuel.
The carbon tax is considered a pigouvian tax. Quoting from the Tax Foundation (2019), the pigouvian tax is a tax on economic activities that generate negative externality. The implementation of this tax makes those who buy objects made through the creation process of carbon solids bear additional costs. Because, the creation of these objects causes environmental damage.
The Implementation Of Carbon Taxes In The World
Some countries have practiced carbon tax with different calculations. Starting from Finland, which has practiced this tax from 1990, followed by Sweden and Norway in 1991. India has practiced this tax since 2010. Then, Japan and Australia explored in 2012, after which Britain in 2013, China in 2017, and South Africa in 2019. Meanwhile in Southeast Asia, only Singapore implemented this tax policy in 2019.
In countries that have practiced a carbon tax, it has an impact on reducing emissions as well as accumulating state revenues from tax revenues. This tax rate is usually subject to per ton of CO2 generated from a production activity, ranging from US$1 per ton to US$139 per ton.
Carbon Tax In Indonesia
How about Indonesia? This carbon tax policy is still a consideration and discussion. Quoting from the State Budget Bulletin, the DPR RI Expert Board for the April 5, 2020 edition, the implementation of this fuel tax provides part of the good result, including reducing greenhouse gas emissions, increasing government income in terms of tax revenue, urging consumers and entrepreneurs to be more energy efficient and investing in energy-efficient technology, and the emergence of administrative simplicity in tax collection.
On the other hand, the implementation of this tax can lead to a greater increase in prices because of the increase in production pay. People's purchasing power also weakens due to the high price of goods, and entrepreneurs find it difficult to compete in the export market. From here it will also have an impact, either indirectly or directly, on the level of people's welfare. The increasing cost of encouraging entrepreneurs to reduce business spending, one of which is in terms of manpower that can lead to unemployment.
During this pandemic, proposals for the implementation of carbon tax have reappeared. Because, this fuel tax can be a new source of acceptance after the Covid-19 pandemic for the country. Also, the enactment of this regulation can urge the reduction of carbon emissions so that it can reduce global warming.
Not only that, but the fuel tax regulation is also believed to support the development of new national renewables (EBT).
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