Nurul Agna Pratama conveying the subject matter of his petition at the preliminary hearing for case No. 1/PUU-XXIII/2025 on the Law on Harmonization of Taxation Regulations, Wednesday (3/5/2025). Photo by MKRI/Fauzan.

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JAKARTA (MKRI) — The increase of value added tax (VAT) from 10% to 11% and 12% under Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law), which has led to public backlash, is being challenged. Petitioner Nurul Agna Pratama believes the increase has led to negative impacts on people from middle- and low income status. In the petition for case No. 1/PUU-XXIII/2025, he challenges the provisions for the increase under Article 7 paragraph (1) letters (a) and (b) as well as Article 7 paragraph (3) of the HPP Law.

At the preliminary hearing, chaired by Constitutional Justice Arief Hidayat, the Petitioner explained that the three articles are in violation of Article 33 paragraph (4) and Article 34 paragraph (1) of the 1945 Constitution. The Petitioner believes the VAT increase from 10% to 11% in 2022 has led to many economic issues, one being small- and medium-scale businesses failing. Therefore, Article 7 paragraph (1) letters (a) and (b) must be annulled alongside Article 7 paragraph (3), which must be revised as it allows for VAT increases of up to 15%.

“Based on the aforementioned elaboration, the Petitioner requests that the Court: declare Article 7 paragraph (1) letters (a) and (b) as well as Article 7 paragraph (3) of the HPP Law contrary to the 1945 Constitution, especially Article 33 paragraph (4) and Article 34 paragraph (1); declare Article 7 paragraph (3) unconstitutional and not legally binding if not interpreted as ‘VAT shall be 0% at a minimum and shall not exceed 10%, or 0% VAT even better,’” said Pratama reading his petitums.

Constitutional Impairment

In response, Constitutional Justice Enny Nurbaningsih urged the Petitioner to explain his legal standing. “Is any right granted by the 1945 Constitution relating to the constitutional impairment or loss that is potential or actual due to the enforcement of the VAT? Is there any causal relation between the two? make a conclusion out of the perceived loss,” she explained.

Meanwhile, Constitutional Justice M. Guntur Hamzah stated that the Petitioner must observe the required format of judicial review petition in the Constitutional Court. “Study the challenged articles on taxes and other retributions. What the Petitioner wishes for is 5–15%. If [you] want to fight for this in the Constitutional Court, there must be an argument that the norms or provisions are unconstitutional,” he said.

Next, Justice Arief asked the Petitioner to study the format of judicial review petition in the Constitutional Court. “Petitions in this format might as well be declared obscure, but it can be revised through hard work in two weeks,” he advised.

At the end of the hearing, Justice Arief announced that the Petitioner would have 14 days to revise the petition, which should be submitted by Tuesday, March 18, 2025. The Court will then schedule a second hearing to hear the revisions to the petition.

Author       : Sri Pujianti
Editor        : Lulu Anjarsari P.
PR            : Fauzan Febriyan
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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