If the prices are different, they will possibly cause a leakage.
Jakarta (ANTARA) - Indonesian Finance Minister Sri Mulyani Indrawati has informed that the imposition of the carbon tax has been postponed till July 2022 since the government is still synchronizing the implementation road map for the tax.

Speaking at the Financial Transaction Reports and Analysis Center’s (PPATK’s) 3rd Legal Forum here on Thursday, she said that according to the Tax Regulation Harmonization (HPP) Law, the policy was initially to be implemented from April 1, 2022.

However, the postponement of the implementation of the policy will not interfere with the national economic recovery program.

The government is still coordinating to synchronize the road map to ensure the implementation of the policy runs well, the minister said.

There are a number of difficulties regarding the imposition of carbon tax since international carbon trading requires a joint global agreement, she noted.

There are differences in tax implementation in each country, especially regarding the quantum of tax, thus a road map for the imposition of a carbon tax must be prepared properly, she said.

For instance, the carbon tax per ton of CO2e in Japan is US$3, France US$49, Spain US$17.48, and Colombia US$4.45.

Moreover, according to calculations, if the international community is successful in overcoming climate change, the carbon price could reach US$125.

"If the prices are different, they will possibly cause a leakage. The development of a market regime and design for carbon policies is quite complicated," Indrawati remarked.

Hence, she assured that the Indonesian government will impose the policy carefully and gradually, especially in the midst of a pandemic situation and efforts to restore the national economy.

"Climate change disaster is almost certain to occur considering the trend of rising global temperatures," she added.

Earlier, the minister had said that the implementation of the carbon tax is part of Indonesia’s commitment to cut carbon emissions by 29 percent on its own or by 41 percent with international support by 2030, in accordance with the target of Nationally Determined Contributions
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Translator: Astrid Habibah, Uyu Liman
Editor: Suharto
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