The Petitioner’s counsel Hendrawan conveying the subject matter at the preliminary hearing of the judicial review of Law No. 7 of 2021 on the Harmonization of Taxation Regulations, Wednesday (5/3/2023). Photo by MKRI/Ifa.

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JAKARTA (MKRI) — Provisions on income tax including benefit in kind as stipulated in Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law) were challenged materially in the Constitutional Court (MK). Heriyansyah, a factory worker residing in Bekasi Regency filed the case No. 38/PUU-XXI/2023. The preliminary hearing for the case took place on Wednesday, May 3, 2023 in the plenary courtroom.

The Petitioner challenges Article 4 paragraph (1a) of the HPP Law, which reads, “The object of tax shall be income, which is any additional economic capacity received or obtained by the Taxpayer, whether originating from Indonesia or outside Indonesia, which can be used for consumption or to increase the wealth of the Taxpayer in question, in any name and form, including: a. reimbursement or compensation in connection with work or services received or obtained including salaries, wages, allowances, honoraria, commissions, bonuses, gratuities, pensions, or compensation in other forms including benefit in kind and/or benefit, unless otherwise specified in this Law.”

Before Constitutional Justices Enny Nurbaningsih (panel chair), Wahiduddin Adams, and Manahan M. P. Sitompul, legal counsel Hendrawan asserted that the article, which also could be interpreted as benefit in the form health facilities, is against Article 28D paragraphs (1) and (2) of the 1945 Constitution.

In the petition, the Petitioner revealed that he had received a letter by the Directorate-General II in response to his request letter on tax on benefit in kind that could potentially drain his wages. The enactment of the HPP Law, he argued, had made health and medical benefit that he received from his employer an object of income tax (PPh), when it had not been previously. This, he stressed, had disadvantaged him. In turn, he requested that Article 4 paragraph (1a) of the HPP Law, especially on benefit in the form health facilities, be declared not an object of tax income.

Justices’ Advice

In response, Justice Manahan M. P. Sitompul said the petition’s format was appropriate, but the substance had not been elaborated in accordance with the Constitutional Court regulation (PMK). “Please note to follow PMK No. 2 of 2021, which is an update from the old PMK. Observe Articles 8 to 10, which detail the petition’s format and substance,” he said.

Meanwhile, Justice Wahiduddin Adams asked the Petitioner to elaborate the background to the petition (posita). “In the posita, explain the contradiction of the norm petitioned…. Also observe the norm in relation to other norms or its elucidation so that it would not be vague,” he said.

Next, Justice Enny Nurbaningsih said the Petitioner must be able to explain the rights that the Law has granted him. “Explain the assumed loss. It must be clear. Then, explain whether this presumed loss is related to the norm petitioned, be it actually or potentially,” she explained.

Before concluding the session, Justice Enny informed the Petitioner that he had 14 workdays to revise the petition and submit it to the Registrar’s Office by May 16 at 14:00 WIB.

Author       : Utami Argawati
Editor        : Lulu Anjarsari P.
PR            : Raisa Ayudhita
Translator  : Yuniar Widiastuti (NL)

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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