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The Petitioner\'s attorney Syawaludin in the ruling hearing of the judicial review of General Provisions and Tax Procedures, Wednesday (26/2) in the Plenary Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

JAKARTA, Public Relations of the Constitutional Court—The entire judicial review petition Law Number 6 of 1983 on General Provisions and Tax Procedures filed by PT Wira Pratama Gasindo was rejected by the Constitutional Court (MK). "The verdict adjudicated, rejects the Petitioner\'s petition for its entirety," Chief Constitutional Justice Anwar Usman in the ruling hearing on Wednesday (26/2/2020).

The Petitioner of case No. 68/PUU-XVII/2019 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.

In the legal considerations read out by Constitutional Justice Manahan M. P. Sitompul, the Court confirmed the state\'s authority in collecting taxes and determining the amount and mechanism of taxation. The legal considerations of the Constitutional Court Decision No. 004/PUU-II/2004 dated December 11, 2004, among others, state that tax payments are the obligations of all Indonesian citizens and foreign residents, the state has authority to impose tax arising from events or matters determined by tax laws, the amount which is in accordance with applicable tax laws.

Also read: Input and Output Taxes for Taxable Entrepreneurs 

According to the Court, tax debt is not as a fine or punishment against taxpayers or because of the civil relationship between the taxpayers and the state, but is solely the taxpayers\' obligations. The principle of fairness in tax collection is that taxpayers calculate their own tax and pay for it immediately after the tax debt arises and not to delay it, because delays can create a heavier burden on taxpayers. 

Justice Manahan conveyed the state\'s authority to collect taxes. Constitutional Court Decision No. 3/PUU-XVI/2018 dated May 9, 2018 stated that in state administration law, the authority the state to collect taxes comes from the state\'s privilege as the power that governs social life and this has been universally accepted. However, in accordance with the basic principles applicable in democratic countries, to avoid arbitrariness, the authority must be regulated with and based on the law. 

Article 23A of the 1945 Constitution reads, "Taxes and other compulsory levies required for the needs of the state are to be regulated by law." Laws are a manifestation of the will of the people. In other words, although the state with its privileges has the authority to collect taxes, the authority is given with the consent of the people and is only used for the needs of the state.

The Court was of the opinion that the state\'s authority to collect taxes is a legitimate authority not only because it is doctrinally legitimate but mainly because it has a constitutional basis in the Constitution, in casu Article 23A of the 1945 Constitution. The fact that not all citizens are able to pay taxes is a social fact or empirical reality, but it cannot be used as a basis for arguing that the state\'s authority to collect taxes is unconstitutional. 

Adhering to the authority granted by Article 23A of the 1945 Constitution, the state has the right to make adjustments and changes to the applicable rules relating to the technical and practical implementation of the law including the amount and mechanism of tax collection due to the need to adjust to existing conditions. According to the Court, the entire argument of the Petitioner of case No. 68/PUU-XVII/2019 has no legal basis. (Nano Tresna Arfana/Lambang/LA)

Translated by: Yuniar Widiastuti

Translation uploaded by 2/28/2020

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