Tax Goes Green, A Discourse of Directorate General of Tax (DGT) Role In Improving World Climate
This is english version from preceeding article titled Pajak Untuk Lingkungan
Since the global warming issue popularized, especially by Al Gore, the world community including the heads of world states has concerned about caring the environment. A lot of conferences discussed climate change has been held so often. It’s starting from the meeting in Japan that bring out Kyoto Protocol, until the last meeting in Copenhagen that has resulted some agreements in improving environtment. If we pay attention to the process and the conference result, apparently the developed country have consider the role of developing country -including Indonesia of course- in the climate change issues.
DGT, as one of Indonesia government institution that holds the greatest role in collecting state revenue, would be able to participate in creating better climate for the world. DGT, through its policy and discretions, really able to assist business community either directly or indirectly to reduce carbon emission their produced and in another side increase tax revenue. The arranged policy can be functioned not only in budgeting function, but also in regulatory function.
The discourse has been developed is the application of environmental taxes, that has become the RUU (Draft), but not ratified as UU yet. In environmental taxes concept, tax will be charged to those who aggravate pollution. Shortly, we can say the polluter pays principle. This policy certainly causes some turmoir in bussines realm. The entrepreneurs would never accept this discretion. Probably this refutation inhibit the process of Environmental Taxes law ratification in DPR.
Another discourse that can be applied is the allotment of tax credit, and addition in tax deductible expense to company that able to provide positive contribution in reducing air emission and pollution produced. Apparently, this policy is more friendly to the business community. In addition, it can also be considered as DGT CSR (Corporate Social Responsibility) as his part in playing role for environmental improvement. Perhaps, this way could give DGT a Kalpaltaru prize or award from Ministry of Environment as the first government agent which able to participate directly in improving climate, along as the first promoter that moved the others government institution to be more concern in climate change issues.
Actually, this tax credit provision and addition in deductible expense have been applied in USA. As we know, not like in Indonesia, the awareness of US people in paying tax and giving attention on tax issues is very high. However, we can take some positive thing from their tax system. Here are some tax credit and addition in deductible expense policy that can be applied in our country :
- If there are entrepreneur who buy hybrid or battery electric car, they can be given more tax credit, such as 30% of car price with maximum amount 10 million reduction. In addition, the car is given full amortization.
- For solar cell using, it is given full and accelerated amortization in order to add deductible expense. Or the purchase of solar cell exempt from Value Added Tax so that the entrepreneurs can receive Tax restitution.
- For Non CFC AC using, will be given tax reduction 10 % from the AC price.
- For green roof installment, then can be given tax reduction 5 % from the green roof cost that already incurred.
- Promoting the using of e-SPT, because less spaper we used, fewer trees are felled.
- Addition deductible expense for the reforestation cost and environmental improvement cost caused by natural resources mining. 2. To use non-CFC air conditioning will be given a tax reduction of 10% of the price of AC.
There are many similar policies that more friendly for environtment and for entrepreneurs in helping them to reduce emission and pollutan substances. Indeed, this policy would reduce our state revenue. But the harm caused by environmental damage that go on late into worse is more harmful than the decline in state revenue. Not mentioned yet, the cost that state budget had to underwritten in improving damaged environment. These policies can also be interesting debate in terms of deductible and undeductible expenses. However, this can be overcome by providing detailed rules and not multi-interpretation of existing policies.
Yeah, this article is only a discourse. A small thought to improve our small planet-called Earth- that has been mandated by God to us. But if we make it as ongoing effort, the universe would be support us. Not only we will feel the effect, but also our grand grand grandchildren will still be able to breathe fresh air as we breathe now.
T. Qivi Hady Daholi