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Constitutional Law expert Refly Harun presented by the Government in the judicial review hearing of the Law on Access to Financial Information for Tax Purposes, Monday (19/2) in in the Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

Law No. 9/2017 on the Stipulation of Government Regulation in Lieu of No. 1/2017 on Access to Financial Information for Tax Purposes into Law provides justice for taxpayers. This was confirmed by former Finance Minister, Muhammad Chatib Basri, as Government Expert in the judicial review hearing of Law on Access to Financial Information Access on Monday (19/2) afternoon. 

According to Chatib, the enactment of the Law on Access to Financial Information increases the tax ratio on Gross Domestic Product. In addition, he continued, the a quo law can open access to taxpayers who in and out of the country. "Due to this law, the Directorate General of Taxation will have access to anyone’s information, so we will no longer hear complaints about [seeking needle in a haystack]," he said in a session led by the Chief Justice of the Constitutional Court, Arief Hidayat. 

Then, Chatib said the state loss would experience losses if the law was revoked. The implication of the revocation of the law is that the state will lose access to taxpayers residing in and outside of the country. "Rp4,884 trillion is not a small figure. This figure will be very important, very useful, and very meaningful if it can be used to improve the quality of our development," he said stating the amount of losses that will be experienced by the state with the revocation of the Law on Access to Financial Information. 

The Importance of Financial Access

Meanwhile, tax observer Darussalam explained that Indonesia uses the self-assessment system and the worldwide tax system, in which the taxpayer is given trust by the government to calculate, consider, pay, as well as report their own tax. In addition, he continued, based on the worldwide tax system, taxpayers are taxed on income derived from within and outside the country. Meanwhile, the government only provides guidance, research, and supervision on tax obligations done by the taxpayers themselves. 

"Therefore, how can the government monitor the accuracy of taxpayers’ tax obligations if there is no access to financial information? In addition, how can the government oversee domestic taxpayers with sources of income abroad if the government does not get financial information from other countries?" Darussalam asked. 

Therefore, he continued, it shows that access to financial information, both domestically and internationally, is needed by the government of Indonesia. Due to the tax situations and the tax systems adopted, it is not surprising that Indonesia\'s tax ratio is still low at 10.8%. Whereas, according to the IMF, the minimum standards for sustainable development to build a nation require a tax ratio of 12.75%. "Access to financial information for tax purposes is required to improve compliance in order to ensure sustainable development," Darussalam said. 

Procedural Administrative Terms 

Then, Constitutional Law expert Refly Harun explained that there needs to be administrative procedural provisions in opening access to financial information of banking customers. He considered the possibility of Law on Access to Financial Information leading to violations of the fundamental rights of citizens, such as abuse of personal banking information. For this reason, the Director General of Taxes must carry out administrative procedures. 

"Therefore, in the implementation other than running or improving itself on administrative procedural provisions, the Directorate General of Taxes still needs to pay attention to the guarantee and protection of privacy rights of citizens related to personal information. In addition, the access is only for tax purposes, not for other purposes," Refly explained. 

Refly also explained the foundation of the formation of legislations consisting of philosophical, sociological, and juridical foundations. The philosophical and sociological foundations of the formulation of legislations can be motivated by any source, including international agreements. 

"When the Indonesian government is going to [get involved in] an international agreement, it must already carefully consider the profit-and-loss factor for the national interest. Therefore, when the Indonesian government decides to [enter] an international agreement, it is because the agreement is very crucial and beneficial for the nation,” said Refly.

E. Fernando M. Manullang as Petitioner of case No. 102/PUU-XV/2017 argues that with the enactment of the Law on Access to Financial Information, the potential losses that can be ascertained are banks and/or other financial institutions may intentionally or unintentionally and/or directly and/or indirectly disclaim any responsibility for guarding the privacy of every Indonesian citizen (WNI). This may occur in every bank and/or other financial institutions operating under the legal jurisdiction of the Republic of Indonesia, under the pretext of implementing the provisions of the law, which are substantially inconsistent with the Automatic Exchange of Financial Information (AEOI). Therefore, the Petitioner requested that the Law on Access to Financial Information be revoked. (Nano Tresna Arfana/LA/Yuniar Widiastuti)

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