Optimizing Carbon Taxation from the Perspective of Tax Law in Indonesia

Abstract

Indonesia, as one of the world’s largest coal producers, faces significant challenges related to the increase of greenhouse gas emissions, particularly methane (CH₄), which has a greater global warming potential than carbon dioxide (CO₂). This study aims to analyze the legal framework for the implementation of a carbon tax in Indonesia as well as the potential imposition of a carbon tax on methane emissions from the coal mining sector. The method used is normative juridical research, employing a statutory approach and literature review. The results indicate that although the carbon tax has been regulated under Law Number 7 of 2021 concerning the Harmonization of Tax Regulations, its implementation still faces obstacles, including the absence of technical regulations, limited emission measurement systems, and unclear mechanisms for allocating carbon tax revenue. Therefore, there is a need to strengthen regulations and emission measurement systems so that the carbon tax can function effectively as a fiscal instrument to control greenhouse gas emissions in Indonesia