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Henny Victoria and Turseno as Principal Petitioner after attending judicial review hearing of the Law on General Provisions and Procedures of Taxation (KUP) and Law on Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (PPNBM) on Tuesday (20/2) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ganie.

The Constitutional Court (MK) held a judicial review hearing of Article 9 paragraph (2a), Article 13 paragraphs (1) and (3) letter c of Law No. 28/2007 on the Third Amendment of Law No. 6/1983 on General Provisions and Procedures of Taxation (KUP Law) and Article 9 paragraph (9) of Law No. 42/2009 on the Third Amendment of Law No. 8/1983 on the Value Added Tax on Goods and Services and Sales Tax on Luxury Goods (PPNBM Law) on Tuesday (20/2 ). The petition was registered under case No. 10/PUU-XIV/2018 was filed by PT Harapan Sinar Abadi, represented by Henny Victoria as President Director. 

Article 9 paragraph (2a) of the KUP Law reads:

"Payment or tax deposit, as set forth in section (1), shall be carried out after due date of payment or tax deposit, shall be subject to administrative penalty in the form of interest as much as Rp2% (two percent) per month since the due date of payment up to the date of payment, and part of the month that shall be fully calculated 1 (one) month." 

Article 13 paragraph (1) of the KUP Law reads:

"Within the period of 5 (five) years after the time at which tax is payable or the end of Taxable Period, part of the Taxable Year, or Taxable Year; Director General of Tax could issue the Underpaid-Tax Assessment, in the event matters as follow are occurred: a. if pursuant to the result of examination or other description of tax payable is not paid or underpaid; b. if the Tax Return is not delivered within the period as set forth in Article 3 section (3) and after being reprimanded in written due to it is not delivered at the appropriate time as set forth in the Letter of Reprimand…." 

Article 9 paragraph (9) of the PPNBM Law reads:

"Input Tax that can be credited, but it has not been credited with the Output Tax in the same Tax Period, it can be credited in the next Tax Period for no more than 3 (three) months after the end of the concerned Tax Period as long as it has not been borne as the cost and has not examined."

Henny, who was present without legal counsel representation, argues the three articles are detrimental to the company of health equipment procurement that she leads. She considers the article has caused the Petitioner to suffer harm and injustice. Article 9 paragraph (2a) of the KUP Law regulates the sanction for tardy payment of income tax. Whereas Article 13 of the KUP Law stipulates the authority of the Directorate General of Taxes within a period of 5 years to stipulate underpaid tax and its fine. Meanwhile, Article 9 paragraph (9) of the PPNBM Law regulates the period after 3 months for overpaid tax. 

According to the Petitioner, these three provisions have eliminated the Petitioner\\'s right to demand the re-submission of tax overpayment. Meanwhile, the state may demand payment of underpaid tax. The Petitioner’s tardy tax payment should provide benefits to the state on the Petitioner’s right that has not been paid to the state treasury. I would be more appropriate if the taxpayer is subject to a fine for this tardiness, for example credited for more than 1 year (not only 3 months). Administrative sanction of 1% (one percent) per month calculated from the due date of one year of invoice submitted up to the date of filing and part of the month shall be fully calculated as 1 (one) month, maximum 24 months. 

"With the application of the articles being reviewed, the Petitioner feels harmed and suffered a loss. The Petitioner seems to pay 3 times the VAT, which they should pay 1 time VAT value. All bank accounts of the Petitioner have been blocked and transferred to the state treasury, then [the authority] confiscated 1 unit of vehicle, a 2002 Honda City, and the KPP [(district tax service office)] has issued SKPKB [(Underpaid Tax Assessment Letter)] as interest as well. Because the Petitioner cannot afford to pay overpaid VAT and administrative sanction, thus the bill on SKPKB wil be greater," Henny said before the Panel of Justices led by Constitutional Justice I Dewa Gede Palguna. 

Justices’ Advice 

With regard to the Petitioner’s arguments, Justice Palguna considered the petition to be a concrete case, like a tax appeal. "Whereas the petition should be a judicial review. In the legal standing, the Petitioner must describe which of their constitutional rights are impaired by the enactment of the law petitioned for review. However, it does not show in this petition," he said. In addition, he advised that the Petitioner argue that the articles being reviewed are contradictory to the 1945 Constitution. 

Meanwhile, Constitutional Court Justice Wahiduddin Adams advised that the Petitioner be accompanied by a legal counsel in the hearing at the Constitutional Court. "I would like to add what the Honorable Constitutional Justice Palguna has conveyed. You should consult a counsel that understands law, especially the Constitutional Court Law," he said. 

Justice Wahiduddin also highlighted the illustration of concrete case in the Petitioner’s petition. However, he observed no causal relationship between the concrete case and the losses suffered by the Petitioner. (ARS/LA/Yuniar Widiastuti)

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