What Challenges Face Carbon Tax Implementation in Indonesia?

Abstract

This study analyzes the technical procedures and administrative challenges of implementing a carbon tax in Indonesia. Using a descriptive qualitative approach, this research combines primary data from questionnaires and interviews with tax officials with secondary data from recent academic literature and regulations. The findings indicate that the carbon tax in Indonesia is formally regulated under Law No. 7 of 2021, involving processes such as identifying tax subjects and objects, measuring emissions, reporting, and enforcement. However, its execution is constrained by several critical factors, including limited technical guidelines, inadequate administrative systems, insufficient human resource capacity, and taxpayer resistance. The results also reveal that while tax officials generally understand the concept, their operational readiness remains moderate. This study contributes empirical insights from an administrative perspective, which remains underexplored in the literature. Strengthening regulatory clarity, improving institutional capacity, and enhancing inter-agency coordination are essential to ensure the effective implementation of carbon tax policies in Indonesia.