Director General of Taxes of the Ministry of Finance, Robert Pakpahan, represented the government in delivering testimony in the judicial review hearing of Law on Land and Building Tax on Wednesday (14/2) in the Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

The provisions on the payment of Land and Building Tax (PBB) as stated in Article 4 paragraphs (1) and (2) of Law No. 12/1985 on Land and Building Tax (PBB Law) is the implementation of Article 23A of the 1945 Constitution. This was stated by the Director General of Taxes of the Ministry of Finance, Robert Pakpahan, in the material judicial review hearing of PBB payment provisions held by the Constitutional Court (MK) on Wednesday (14/2).

Furthermore, Robert representing the Government, stated that Article 23A of the 1945 Constitution is the legal basis for tax collection as a source of state revenue that has important value in the implementation and improvement of national and regional development, including tax on land and building (PBB). "Therefore, the position of the PBB Law, the Law on Regional Gross Regional Domestic Product, and other tax laws in force in the Unitary State of the Republic of Indonesia have been constitutionally validated in accordance with Article 23A of the 1945 Constitution," he stressed.

As a manifestation of community participation in national development, Robert continued, the community is obligated to pay tax on land and building. The results of the tax revenue will be utilized by the government to build public facilities and infrastructure for the welfare of all citizens. "Thus, it can be said that the tax is a tool that supports the achievement of the goal of the Indonesian nation, which is to create a just and prosperous society in accordance with the meaning contained in Article 28H paragraph (1) of the 1945 Constitution," he said in response to petition No. 3/PUU-XVI/2018.

On the other hand, said Robert, the formation of the PBB Law is one of the government\'s efforts to reform the taxation system by simplifying the various charges on land and building, as well as the tariffs and modes of payment. This is in line with the philosophical foundation of the PBB Law, that the people who own and/or enjoy the benefits of land and building are required to pay taxes on the land and building.

In his statement, Robert mentioned Article 4 paragraphs (1) and (2) of the PBB Law is the implementation of the mandate of Article 23A of the 1945 Constitution, so the Constitutional Court shall not materially review the provision. Furthermore, he explained that based on Article 23A of the 1945 Constitution, taxes should be based on law. Therefore, Article 4 paragraphs (1) and (2) of the PBB Law regulates the provisions chosen by legislators in determining the tax subjects and taxpayers. Because Article 4 paragraphs (1) and (2) of the PBB Law contain provisions on the procedures for achieving state objectives in order to collect tax revenues, it can be said that Article 4 paragraphs (1) and (2) of the PBB Law is an instrumental policy chosen by legislators as the elaboration to Article 23A of the 1945 Constitution.

"In relation to this instrumental policy, the Constitutional Court in its Decision No. 006/PUU-I/2003 dated March 30, 2004 stated that in the 1945 Constitution it has been stipulated that it should be a means to achieve meaningful objectives of instrumental policy, so it is the authority of legislators or the House of Representatives and the President to choose alternatives. The Constitutional Court is not authorized to review the instrumental policies that have been made by legislators," Robert said in the hearing chaired by the Chief Justice of the Constitutional Court, Arief Hidayat.

A number of individual Petitioners have objected to the obligation to pay the land and building tax as stipulated in Article 4 paragraphs (1) and (2) of the PBB Law. According to the Petitioners, the a quo article is contradictory to the phrase "live" as stated in Article 28H paragraph (1) of the 1945 Constitution. Thus, the Petitioners requested that the Court declare the article having no binding legal force and contradictory to the 1945 Constitution. (ARS/LA/Yuniar Widiastuti)