Priority policy directions for development in 2023 include low-carbon development and an energy transition that responds to climate change. Responding to this, it is necessary to establish an implementation plan for carbon trading and carbon taxes in Indonesia.

This was conveyed by Lecturer at the Faculty of Administrative Sciences, University of Indonesia (FIA UI) Dr. Titi Muswati Putranti, M.Sc., as a speaker at the National Seminar on Tax Outlook 2023 which was held by the Indonesian Association of Tax Centers and Tax Academics (PERTAPSI), Monday 12 December 2022.

Titi, also the Deputy Chairperson of PERTAPSI, said that for a carbon trading scheme, it is necessary to measure and acknowledge the ownership of carbon units for certificates of emission reductions/offsets.

“In addition, we recommend that the government set limits and concessions for target sectors, review pricing policies on carbon-intensive goods/activities, create good carbon trading governance, and phase out coal and switch to renewable energy and energy conservation,” he said.

As for carbon taxes, Titi recommends that Indonesia also needs good carbon tax administration and accounting. “There is also a tax on carbon trading, and it is also necessary to regulate the impact of a carbon tax on fuel prices and the green industry as well as its impact on certain sectors/populations and the mechanism for dealing with it,” he said.

The Law on Harmonization of Tax Regulations (HPP) regulates the imposition of Indonesia’s carbon tax, which is a rate set at IDR 30 per kilogram of carbon dioxide equivalent (CO2e) or the same unit. Titi assesses that the determination of these tariffs tends to be small compared to the average global carbon tax price. According to the International Monetary Fund (IMF), the global carbon tax is 75 dollars per ton or the equivalent of Rp—1300 per kilogram.

This event is part of a series of events launching and inaugurating PERTAPSI management for 2022-2026. Titi was elected and appointed as Vice Chair I of PERTAPSI.

At the event, the Dean of FIA UI, Prof. Dr. Chandra Wijaya, M.Sc., M.M., also congratulated Titi on the new mandate and hoped that in the future PERTAPSI and FIA UI can collaborate for the development of tax administration knowledge in Indonesia.