Chief Justice Suhartoyo and Deputy Chief Justice Saldi Isra at a judicial review hearing of Law No. 1 of 2022 on Financial Relations Between the Central and Regional Governments, Monday (8/5/2024). Photo by MKRI/Ifa.

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JAKARTA (MKRI) — The Constitutional Court (MK) postponed a material judicial review hearing of Law No. 1 of 2022 on Financial Relations Between the Central and Regional Governments (HKPD Law) for cases No. 19/PUU-XXII/2024, No. 31/PUU-XXII/2024, and No. 32/PUU-XXII/2024 on Monday, August 5, 2024. The Court was supposed to hear witnesses for cases No. 19/PUU-XXII/2024 and 31/PUU-XXII/2024 and the House of Representatives (DPR).

“The Registrar’s Office reported that the [written] testimonies had only been received, which is not in line with the provision for judicial practice in the Constitutional Court and existing regulations. Therefore, the Court reschedule the witness examination hearing. In addition, the Petitioner of case No. 31 admitted that his witnesses are unprepared,” said Chief Justice Suhartoyo in the plenary courtroom.

He added that to integrate the witnesses’ statements and to hear the House, the Court rescheduled the hearing. The next hearing will take place on August 15 at 13:30 WIB.

Also read:

Business Owners Ask Spa to Be Excluded from Art and Entertainment Category

Petitioners: Spa Businesses Could Go Under Due to 40 Percent Tax

Karaoke Bar Owner Challenges Provision on Entertainment Tax

Karaoke Bar Owner Revises Petition on Entertainment Tax

Business Owners Questions Entertainment Tax Rates

Business Owners Ask Entertainment Tax Be Capped at Ten Percent

Govt: High Tax Rates for Discotheques and Spas as Non-Basic Needs 

Expert: SPA Is a Health Service, Not Entertainment 

The Petitioners of case No. 19/PUU-XXII/2024 feel they were disadvantaged because their spa business, which is in the health category, has been categorized as providers of art and entertainment services alongside discotheques, karaoke, nightclubs, and bars. Consequently, they must pay 40-75% PBJT imposed by the regional government. Meanwhile, only 10% PBJT is imposed on massage and reflexology businesses. They ask that steam baths/spas be excluded from art and entertainment services.

Meanwhile, the petition No. 32/PUU-XXII/2024 was filed by business owners who represent six legal entities in tourism and service/entertainment: central executive board of the Indonesian Tourism Industry Association (DPP GIPI), PT Kawasan Pantai Indah, CV Puspita Nirwana, PT Serpong Abadi Sejahtera, PT Citra Kreasi Terbaik, and PT Serpong Kompleks Berkarya. They admitted to have had constitutional impairment due to the enforcement of Article 58 paragraph (2) of the HKPD Law.

The case No. 31/PUU-XXII/2024 was filed by Santoso Setyadji, owner of a family karaoke business. He challenges Article 58 paragraph (2) and the elucidation to Article 58 of the HKPD Law. Prior to the provision’s enactment, business owners had paid taxes to the regional government following existing regulations. The Petitioner argues that the latest PBJT tariff of at least 40% would impact his consumers, who would bear the brunt of the increase. He believes consumers would think twice about the costs of goods and/or services they purchase, as the costs would not include the high tax.

Therefore, the Petitioner requests that the Court add the phrase “except for family karaoke business” in Article 58 paragraph (2) of the HKPD Law and to declare Article 58 of the HKPD Law unconstitutional and not legally binding.

Article 58 paragraph (2) of the HKPD Law reads, “Specifically, PBJT rates for entertainment services at discotheques, karaoke, nightclubs, bars, and steam baths/spas are set at a minimum of 40% (forty percent) and a maximum of 75% (seventy-five percent).”

Author            : Mimi Kartika
Editor             : Lulu Anjarsari P.
PR                 : Tiara Agustina
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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