Another material judicial review hearing of Law No. 7 of 2021 on the Harmonization of Taxation Regulations, Wednesday (5/17/2023) in the plenary courtroom. Photo by MKRI/Zahra.

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JAKARTA (MKRI) — The Constitutional Court (MK) held another material judicial review hearing on provisions regarding income tax including benefit in kind as stipulated in Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law) on Wednesday, May 17, 2023 in the plenary courtroom. Heriyansyah, a factory worker residing in Bekasi Regency, filed the case No. 38/PUU-XXI/2023.

At the petition revision hearing, on behalf of the Petitioner, Hendrawan explained that the revised petition had not been submitted. “At this second hearing, [my] client has agreed to withdraw the petition, Your Honors. The reason that the client gave is that the subject matter was not under the Court’s jurisdiction. We were about to submit the request letter but have yet to do it since the reception was closed,” he said.

In response, Constitutional Justice Enny Nurbaningsih left it to the Petitioner. “If after careful consideration and our advice at the previous hearing, the petition will be withdrawn, please submit the letter as part of the formal procedure of the Court’s Registrar’s Office. However, at this hearing, once again the Petitioner’s counsel declared that petition No. 38/PUU-XXI/2023 is to be withdrawn?” she stressed.

Also read: Factory Worker Challenges Provisions on Income Tax

The Petitioner challenged 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.”

The Petitioner asserted that the article, which also could be interpreted as benefit in the form health facilities, was against Article 28D paragraphs (1) and (2) of the 1945 Constitution. He also 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.

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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