The petition revision hearing for case No. 1/PUU-XXIII/2025 on the Law on Harmonization of Taxation Regulations, Tuesday (3/18/2025). Photo by MKRI.

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JAKARTA (MKRI) — The Constitutional Court (MK) held the second hearing for case No. 1/PUU-XXIII/2025 on Article 7 paragraph (1) letters (a) and (b) as well as Article 7 paragraph (3) of Law No. 7 of 2021 on the Harmonization of Taxation Regulations (HPP Law). At the petition revision hearing, Petitioner Nurul Agna Pratama, a university student, explained that the elaboration of the Court’s authority over the Law being petitioned had been revised. He also affirmed his legal standing and constitutional impairment. He argued that PPN or VAT is a tax that all Indonesian citizens pay, thus its increase would have a major impact on society, especially those from middle- and low income status.

“The formulation of the articles must consider juridical, philosophical, and sociological aspects. However, the formulation of the articles on VAT increase did not consider juridical, philosophical, and sociological aspects because after they were enforced, they have impacted people from middle- and low income status. Philosophically, the articles are also contrary to justice. Juridically, they are in violation of Article 33 paragraph (4) and Article 34 paragraph (1) of the 1945 Constitution,” Agna explained before Constitutional Justices Arief Hidayat, Anwar Usman, and Enny Nurbaningsih on Tuesday, March 18, 2025 in a panel courtroom.

Also read: VAT Increases to 12 Percent Seen as Unconstitutional

At the preliminary hearing on Wednesday, March 5, 2025, the Petitioner argued that the increase of value added tax (VAT) from 10% to 11% and 12% has led to public backlash. He believes the increase has led to negative impacts on people from middle- and low income status. As such, he argued that the articles are in violation of Article 33 paragraph (4) and Article 34 paragraph (1) of the 1945 Constitution. He also 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%.

In his petitums, 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 better yet, 0% VAT.

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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