Sorry Mr. Jokowi! Carbon Tax Still Abu-Abu, Pamer Plans At The G20 Summit Are Likely To Cancel

President Joko Widodo (left) talking with Finance Minister Sri Mulyani (Photo: Cabinet Secretariat)

JAKARTA - Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance, Febrio Kacaribu, gave the latest explanation regarding the plan to implement the domestic carbon tax.

In his statement, he said that the government was still conducting a comprehensive study of the positive and negative excesses in the implementation of the regulation.

"We are still discussing the carbon market scheme, such as achieving the nationally determined contribution (NDC) target, the readiness of sectors and of course the condition of the domestic and global economy," he said when answering reporters' questions, Monday, September 26.

According to Febrio, the government has currently chosen to focus its attention on optimizing fiscal instruments in facing existing challenges.

The government is prioritizing the function of the APBN to ensure the availability and stabilization of domestic energy and food prices, including providing social protection to the community. So that we will continue to calibrate the plan to implement a carbon tax considering the high uncertainty in the global economy," he said.

For information, the carbon tax is part of the national tax reform as stated in the Law on Harmonization of Tax Regulations (HPP) which was originally scheduled to take effect on July 1, 2022.

However, last June Febrio emphasized that the implementation of the fiscal policy could not be carried out according to schedule. Even so, he had emphasized that the carbon tax would still be implemented this year.

In fact, Sri Mulyani's subordinate stated that the carbon tax would be a place for Indonesia's demonstrations at the next November G20 Summit in Bali which was attended by a number of heads of state and government.

The government will continue to make the implementation of the carbon tax in 2022 as a driving force for strategic policies that become a showcase in the G20 high-level meeting later. Including from this showcase section, it also encourages other climate change mitigation actions, such as energy transition mechanisms, which on the one hand is to retire early on coal power plants and accelerate new and renewable power plants," Febrio said on June 23.