Deputy Chief Justice Saldi Isra confirming the Petitioner’s letter of power of attorney at the material judicial review hearing of the Law on the Harmonization of Taxation Regulations, Tuesday (9/5/2023). Photo by MKRI/Ifa.

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JAKARTA (MKRI) — Another hearing for the material judicial review of Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law) was held by the Constitutional Court (MK) on Tuesday, September 5, 2023 in the plenary courtroom. The petition No. 67/PUU-XXI/2023 was filed by Leonardo Siahaan, a private employee.

The Petitioner challenges Article 4 paragraph (1) letter a 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.”

This third hearing was supposed to present the House of Representatives’ (DPR) and the president/Government’s testimonies, but the constitutional justices announced that the hearing be delayed since the Petitioner was represented by legal counsels Michael Stevenaro Justin Nainggolan and Heriyansyah at this hearing despite not mentioning them in the petition conveyed at the previous hearing.

Deputy Chief Justice Saldi Isra requested that the Petitioner attend the hearing in person to explain whether he had given power of attorney to the legal counsels. “So, please revise [the petition] if you are his permanent proxies,” he said.

In response, counsel Heriyansyah said the Petitioner was indisposed. “So, he gave both of us power of attorney on [September] 4,” he explained.

Chief Justice Anwar Usman then announced that the hearing be adjourned until Tuesday, September 19 at 11:00 WIB to hear the House of Representatives (DPR) and the president/Government.

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At the preliminary hearing on Monday, July 10, the Petitioner said health facilities and medical expenses have been insured by the company. Previously, they had been the responsibility of the company and employees did not pay any tax for it and had not been categorized as a taxable object.

He asserted that paying for such tax would put a burden on his finances. He also said that health facilities and medical expenses are an employee’s right, but now are taxable.

“The issue is that it was not a taxable object, but now is. Please imagine, Your Honors, for example my salary is two million, then it is cut for health facilities and medical expenses. This cut would harm me, as it might cut my salary from two million to just one million. It is ironic and takes away the rights of employees,” he explained.

The Petitioner questioned why health facilities and medical expenses are objects of income tax. “We know what the objects of income tax are. There is no connection to health facilities and medical expenses. I don’t understand why the Government made health facilities [and medical expenses] taxable,” he stressed. 

Author       : Utami Argawati
Editor        : Nur R.
PR            : Fitri Y.
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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