Carbon Tax Will Be Reporting by Separate Periodic and Annual Tax Return

The Minister of Finance (MoF) has officially stipulated new rules for the issuance of Tax Assessment Letter (SKP) and Tax Collection Letter (STP) for carbon tax.

Together with the issuance of PMK Number 80 Year 2023, the Minister of Finance formulated a new scheme regarding the procedure for issuing Tax Assessment Letter (SKP) and Tax Collection Letter (STP) to collect taxes, including carbon tax.

This is stated in Article 3 and Article 4 of PMK 80/2023, in which the Directorate General of Taxes can issue SKP and STP for carbon tax.

The regulation, which was issued at the end of August, also explicitly states that SKP can be issued on the Periodic Carbon Tax Return and Annual Carbon Tax Return.

This means that the Annual Carbon Tax Return will be reported separately from the Annual Income Tax Return.

"The Tax Period in the Tax Assessment Letter as referred to in paragraph (1) is the Tax Period in the Tax Return.... Carbon Tax Return."

"Part of Tax Year or Tax Year in Tax Assessment Letter.... Is part of the Tax Year or Tax Year in the Income Tax Return and Annual Carbon Tax Return," quoted in Article 13 paragraph (4).

Carbon tax itself is defined as a tax imposed on carbon emissions that have a negative impact on the environment, with the taxation system used as withholding.

STP can be issued to taxpayers who do not perform their obligations properly. How can STP be issued on carbon tax?

Referring to PMK 80/2023, DGT can issue STP for:

1.       Carbon tax collectors or taxpayers conducting carbon emission activities who are late in remitting carbon tax,

2.       Carbon tax collectors or taxpayers conducting carbon emission activities who do not or are late in reporting the periodic carbon tax return, and/or

3.       Carbon Tax Collector or Taxpayer conducting carbon emission activities corrects the Periodic Carbon Tax Return which results in higher Carbon Tax payable.

Although until now there has been no technical clarity formalized regarding the carbon tax administration system, the rules regarding the issuance of STP and SKP on carbon tax have been enacted since the date of promulgation of PMK 80/2023, namely August 22, 2023.