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Indonesia's car sales tax cut may harm the environment, requiring another policy to reduce emissions

By Haryanto, Researcher, The Purnomo Yusgiantoro Center
Filda Citra Yusgiantoro, Senior Researcher, The Purnomo Yusgiantoro Center
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Southeast Asia’s largest economy, Indonesia, has provided a tax incentive in the form of a cut in car sales tax to help the country’s automotive industry recover from the COVID-19 pandemic impacts. However, this tax cut could damage the environment as more cars on the streets will increase carbon emissions.

Indonesia’s car sales

Indonesia is the second-biggest

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