---

Panel revision hearing of the judicial review of the Taxation Law, Tuesday (26/11) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

JAKARTA, Public Relations of the Constitutional Court—The revision hearing of the judicial review of Article 2 paragraph (4a) of Law Number 6 of 1983 on General Provisions and Tax Procedures as amended into Law Number 16 of 2009 on General Provisions and Tax Procedures (KUP), and Article 9 paragraphs (2) and paragraph (8) letter a of Law Number 8 of 1983 on Goods and Services and Sales Tax on Luxury Goods as well as Value Added Tax on Goods and Services and Sales Tax on Luxury Good (PPN & PPnBM Law) was held by the Constitutional Court (MK) on Tuesday (26/11/2019).

The Petitioner\'s attorney Syawaludin conveyed several points of revision to Constitutional Justice Suhartoyo (panel chairman), with Constitutional Justices Enny Nurbaningsih and Manahan M. P. Sitompul (panel members).

"Following [your] recommendations in the previous session, the focus being reviewed is Law Number 28 of 2007 on the Third Amendment to Law Number 6 of 1983 on General Provisions and Tax Procedures. Next, Law Number 42 of 2009 on the Third Amendment to Law Number 8 of 1983 on Value Added Tax on Goods and Services, and Sales Tax on Luxury Goods," Syawaludin explained.

Another attorney Zenitha Syafira explained the comparison between the petition No. 68/PUU-XVII/2019 and a previous petition No. 13/PUU-XIV/2016.

"There is a difference between the judicial review Number 13/PUU-XIV/2016 and the a quo review Number 68/PUU-XVII/2019. The difference is that […] PKP that registers on their initiative, tax obligation is set at five year while those who register themselves, their tax obligations start from the date set by the [Directorate General of Taxes] and their tax obligations cannot be set back," Zenitha said.

The emphasis of petition No. 68/PUU-XVII/2019, Zenitha said, is that the Petitioner requests that the rights and obligations of taxable entrepreneurs must be in balance if their tax obligations are set back for five years.

The petition No. 68/PUU-XVII/2019 filed by PT Wira Pratama Gasindo. The Petitioner\'s attorneys Syawaludin and partners explained that the Petitioner is a private legal entity and an employer of taxpayers who took the tax amnesty and reported all of their assets at the district tax service office (KPP). However, the Petitioner’s constitutional right to obtain justice and legal certainty over the enactment of the provisions on the lack of recognition of the tax input in the Petitioner\'s tax returns (SPT) before it was confirmed as a taxable entrepreneur (PKP) is potentially impaired.

Thus, the Petitioner filed an objection to the issue. The Petitioner is an (non-subsidized) LPG agent from PT Pertamina and has paid input VAT in 2016. The Petitioner has never collected output VAT from buyers of non-subsidized LPG prior to being confirmed as a taxable entrepreneur. In addition, underpaid VAT based on gross income which must collect its own VAT, factually means it must be borne and paid by the Petitioner.

Article 2 paragraph (4a) of the KUP Law reads, “Taxation Obligation for the Taxpayer whose Taxpayer Code Numbers has been issued or has been established as Taxable Entrepreneur in ex officio, as set forth in section (4), since the Taxpayer meets the subjective and objective requirement in accordance with the provision of the taxation legislation, not longer than 5 (five) years prior the issuance of Taxpayer Code Number and/ or prior the establishment as the Taxable Entrepreneur”

Article 9 paragraph (2) of the PPN & PPnBM Law reads, “Input Tax in a Taxable Period is credited with an Output Tax in the same Taxable Period.” Article 9 paragraph (8) letter a reads, “Crediting of the Input Tax as referred to in paragraph (2) cannot be applied to expenditures for: a. acquisition of Taxable Goods or Taxable Services prior to the establishment of the Entrepreneur as a Taxable Entrepreneur.”

The Petitioner argues that Article 2 paragraph (4a) of the KUP Law shows real injustice because it only states the "tax obligation" of taxpayers who are confirmed as taxable entrepreneurs is now maximum 5 (five) years. Even though the taxpayers have their "taxation rights", when it is limited to no longer than 5 (five) years, it should apply equally to the taxation rights and obligations of the entrepreneurs.

"Therefore, in order to create fairness and fair legal certainty, Article 2 paragraph (4a) of the KUP Law must be interpreted as taxation rights and obligations for taxpayers whose Taxpayer Identification Number is issued and/or that are confirmed as a Taxable Entrepreneur as intended in paragraph (4), starts when the taxpayers fulfill subjective and objective requirements in accordance with the provisions of tax legislation, no later than five years before the issuance of the Taxpayer Identification Numbers and/or are confirmed as Taxable Entrepreneurs," said Syawaludin, one of the Peittioner’s attorneys. (Nano Tresna Arfana/NRA)

Translated by: Yuniar Widiastuti

---