Constitutional Justice Manahan M. P. Sitompul at the ruling hearing of the judicial review of Law on the Harmonization of Taxation Regulations, Thursday (7/7/2022). Photo by Humas MK/Ifa.

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Thursday, July 7, 2022 | 16:05 WIB

JAKARTA, Public Relations—The Constitutional Court (MK) ruled to dismiss and reject the material judicial review petition against Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law) filed by Priyanto, an entrepreneur.

“[The Court] adjudicated; declares the Petitioner’s petition for Article 4A paragraph (2) letter b as referred to in Article 4 point 1 and its Elucidation; Article 4A paragraph (3) letter a as referred to in Article 4 point 1 and its Elucidation; Article 4A paragraph (3) letter b as referred to in Article 4 point 1 and its Elucidation; Article 4A paragraph (3) letter g as referred to in Article 4 point 1 and its Elucidation; Article 7 paragraph (1) in Article 4 point 2; Article 16B paragraph (1a) letter j points 1, 2, 3, and 6 and its Elucidation in Article 4 point 6, Article 5 to Article 12 in Chapter V on the Taxpayer Voluntary Disclosure Program; the word ‘can’ in Article 40B paragraph (3) in Article 14 point 2; and the word ‘can’ in Article 64 paragraph (1) in Article 14 point 3 of Law No. 7 of 2021 inadmissible; rejects the petition for the remainder,” said Chief Justice Anwar Usman alongside the other constitutional justices at the pronouncement of Decision No. 19/PUU-XX/2022 on Thursday, July 7, 2022.

The Court asserted that the Petitioner had not conveyed any argument indicating the contradiction between the articles petitioned for review and the articles in the 1945 Constitution used as touchstones.

“In addition, the Petitioner did not elaborate the connection between the constitutional impairment that he suffered and the unconstitutionality of the norms. Instead, he elaborated more the potential impairment in a concrete case that he could potentially be involved in and direct the Court to formulate a new norm by declaring an article that has been removed form the a quo Law valid by requesting an additional interpretation as he explained in the petition,” said Constitutional Justice Manahan M. P. Sitompul reading out the Court’s opinion.

Also read: Entrepreneur Questions Clusters in HPP Law

Petition Obscure

Furthermore, the Court believed the Petitioner’s argument had not elaborated the contradiction between the articles petitioned for review and the 1945 Constitution, especially the implementation of value added tax (VAT/PPN) for educational services, basic goods, medical services, and social services, tax and duty amnesty that the Petitioner believed had led to legal uncertainty as guaranteed in the 1945 Constitution. In addition, the Court believed the elaboration had not been supported by sufficient and relevant evidence as referred to Article 31 paragraph (2) of the Constitutional Court Law.

The Court could not understand the background to the petition in relation to the petitum, in which the Petitioner requested that the a quo articles be declared unconstitutional and not legally binding, that some articles that had been removed be declared legally binding, and that a phrase be added following the Petitioner’s request. Such obscurity, the Court asserted, had made the petition obscure.

Also read: Petitioner of HPP Law Revises Petition

DPD’s Consideration

The Court asserted that it was important to re-emphasize that the Regional Representatives Council (DPD) had been authorized to offer its consideration in the discussion of the APBN Bill and any bills relating to taxes, education, and religion, but it did not indicate the DPD’s authority to participate in discussing the bills. The most important thing, the Court stated, is that the House of Representatives (DPR) and the president have an obligation to ask the DPD for consideration on the APBN Bill and bills relating to taxes, education, and religion. This was confirmed by the Court in the considerations of Decision No. 92/PUU-X/2012, i.e. sub-paragraph (3.18.5), so discussion of the formation of regulations under the law related to taxes is not part of the DPD’s authority.

Based on that consideration, the DPD was only constitutionally granted the right to offer consideration in discussing the APBN Bill and any bills relating to taxes, education, and religion. Meanwhile, the House’s involvement in forming regulations under the law related to taxes was explicitly restricted only to consultation. The Court also emphasized that the DPD could oversee the implementation of laws on taxes and report it to the House to be followed up, in line with Article 22D paragraph (3) of the 1945 Constitution, which reads, “The DPD may supervise the implementation of laws regarding: regional autonomy; the establishment, proliferation, and merger of regions; the management of natural and other economic resources; the implementation of the state budget, taxation, education, and religion; and may submit the results of this supervision to the DPR as input for follow-up considerations.”

Based on the aforementioned considerations, the Court asserted that the Petitioner’s argument that the HPP Law was unconstitutional as it did not involve the DPD in forming various regulations under the law on taxation and had disregarded its function, duties, and role in providing inputs and supervising in relation to taxation did not indicate its contradiction to Article 22D paragraphs (2) and (3) of the 1945 Constitution. The Court ruled that the Petitioner’s petition was legally groundless.

Writer        : Nano Tresna Arfana
Editor        : Nur R.
PR            : Raisa Ayudhita
Translator  : Yuniar Widiastuti (NL)

Translation uploaded on 7/8/2022 15:21 WIB

Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.

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