Road construction project at Jl. Abdul Muis, Central Jakarta, using heavy equipment. Photo by PR/Ilham.

The Constitutional Court (MK) finally granted the petition for the judicial review of Law No. 28/2009 on Regional Taxes and Levies (PDRD Law) entirely. The Decision of Case No. 15/PUU-XV/2017 was read by the Chief Justice of the Constitutional Court, Arief Hidayat, in the presence of other constitutional justices in the ruling hearing, Tuesday (10/10) afternoon. "The ruling hears, grants the Petitioners’ petitions entirely," said Justice Arief reading out the verdict. 

In relation to the petition filed by Aking Soejatmiko Director of PT Tunas Jaya Pratama (Petitioner I), Yupeng Director of PT Mappasindo (Petitioner II), Engki Wibowo Director of PT Gunungbayan Pratamacoal (Petitioner III), the Court is of the opinion that Article 1 point 13 of the PDRD Law along the phrase "heavy equipment and large equipment that in their operations use wheels and motors and are not affixed permanently" is reasonable according to law. 

In addition, according to the Court, Article 5 paragraph (2) of the PDRD Law along the phrase "including heavy equipment and large equipment" as well as Article 6 paragraph (4) and Article 12 paragraph (2) of the PDRD Law are also reasonable according to law. 

"It does not mean that heavy equipment should not be taxed. Besides, the Petitioners, both in their petition and in the hearing also repeatedly stated that the a quo article was in no way avoiding the obligation to pay taxes," said Constitutional Justice I Dewa Gede Palguna who read the Court’s opinion. 

Thus, continued Justice Palguna, heavy equipment can be taxed. However, the legal basis for taxes on heavy equipment is not because heavy equipment belongs to motorized vehicles. 

"Therefore, a new legal basis is required in the legislation for taxation of heavy equipment, which can be done by amending Law No. 28/2009 (PDRD Law) insofar as it concerns with the taxation of heavy equipment," Justice Palguna stated. 

Furthermore, considering that the amendment process to the PDRD Law takes some time, the Court stated that it was important to provide a grace period to legislators to amend the law. 

"The grace period is to avoid a legal vacuum on the taxation of heavy equipment as long as the amended law has not been enacted. Heavy equipment can be taxed based on the old legislation. Conversely, if the grace period for the amendment of the law has been exceeded and the new law has not been put into force, heavy equipment should no longer be taxed under the old law," said Justice Palguna. 

Such arrangements, according to the Court, are in accordance with the principles of the rule of law because the grace period provides certainty, justice, and expediency. On the other hand, pursuant to Article 23A of the 1945 Constitution, the state is only justified to impose other taxes and levies that are forceful by law. (Nano Tresna Arfana/LA/Yuniar Widiastuti)