| Summary: | A circular economy seeks to extend products, raw materials, and existing resources in the wheel of life to make them useful as long as possible. The conversion from the old economy form to a circular economy is a complex practice that requires the involvement of appropriate policy interventions, one of which is tax policy. The current situation of tax policy is described in this study, while analyzing the inhibiting factors and weaknesses of tax policy instruments and proposing a design for tax policy reconstructions that can be built for the implementation of a circular economy in Indonesia. The soft system methodology (SSM) used in this research. The evaluation outcome shows that the tax policy is still limited as it has not focused on efforts to implement a circular economy-based industry; therefore, tax incentive policies are considered to still not be effective. In addition, the administration of tax policy implementation is not simple; it is not neutral and, thus, does not attract industry. Further research is required at the framework level or even for each type of industry. More detailed examination is required for tax policies proposed on the basis of the results of this study.
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