The carbon tax, despite a derisory rate, has companies on edge – business

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Vincent Fabian Thomas (The Jakarta Post)

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Jakarta ●
Tue 19 October 2021

The government will use tax policies to tackle climate change by putting a price on carbon emissions, but companies have expressed opposition as experts say the provisions will do little to bring Indonesia closer to its climate targets.

The Harmonized Tax Law (HPP) adopted on October 7 introduces a carbon tax with a rate slightly higher than the carbon price on the domestic market but with a minimum rate of Rp 30,000 (USD 2.10) per tonne of carbon dioxide equivalent. carbon (CO2e). It will be implemented under a cap and trade system.

Under the new policy, companies exceeding the emissions threshold are subject to the tax unless they purchase carbon credits – a tradable permit to release emissions up to a certain limit – from companies whose emissions are below the cap and which are ready to sell part of their unused allowances. .

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