Green Tax: Challenges and Steps Toward a Sustainable Economy

On 15 October 2025, the Indonesian government highlighted a green‑tax initiative to fund clean‑energy projects and expand electric‑vehicle use. The tax is positioned as a fiscal instrument that can cut emissions while attracting green investment.

The shift to a low‑carbon economy is estimated to require US$20‑25 billion per year through 2030 for renewable‑energy infrastructure, clean transport, and green technology. Although Indonesia has introduced measures such as VAT exemption for electric vehicles and a super‑deduction scheme for renewable‑energy research, implementation is hampered by complex regulations, slow administrative processes, and weak legal certainty. Countries in Europe, Japan, and South Korea have adopted green‑tax‑credit models that tie tax reductions to emission cuts, thereby drawing substantial clean‑energy investment.

If the four proposed actions—green tax credit, carbon‑market integration, full digitalisation, and expanded incentives for strategic sectors—are carried out, green tax could become a catalyst for emission reductions and generate new economic opportunities and green‑job creation. The policy would also support Indonesia’s pledge to achieve Net Zero Emission by 2060. Its success will depend on consistent regulations and support from businesses. Read the full source at news.ddtc.co.id (https://news.ddtc.co.id/komunitas/lomba/1814420/pajak-hijau-mesin-baru-menuju-ekonomi-berkelanjutan).