Separating DGT from the Ministry of Finance: Is it Possible?

Separating DGT from the Ministry of Finance: Is it Possible?

PPN - 19 Feb, 2024 14:02 WIB

Jakarta, Ideatax -- The Constitutional Court rejected the judicial review of the Directorate General of Taxes (DGT) separation from the Ministry of Finance. Through its ruling Number 155/PUU-XXI/2023 on January 31, 2024, the Constitutional Court decided that there was no legal reason to establish a separate ministry-level institution with the authority to collect taxes separately from the Ministry of Finance (Kompas, 2024).

The Constitutional Court believes that the separation or unification of DGT from the Ministry of Finance is an open legal policy of the legislator. This is as contained in the provisions of Article 17 paragraph (4) and Article 23A of the 1945 Constitution. The purpose is clear: to adjust the development of the scope of government. As information, the judicial review lawsuit was filed by a tax consultant against Article 6 paragraph (1) and paragraph (2) letter a of Law Number 17 Year 2003 on State Finance (KN Law) and Article 5 paragraph (2), Article 6, Article 15 of Law Number 39 Year 2008 on the Ministry of State (State Ministry Law).

Article 6 of Law No. 17/2003 on State Finance stipulates that the President, as the Head of Government, holds the power of state financial management as part of the power of government. Henceforth, the power is delegated to the Minister of Finance, as fiscal manager and government representative, in the ownership of separated state assets.

On the other hand, Article 5 paragraph (2) of Law No. 39 of 2008 stipulates that certain government affairs are religion, law, finance, security, human rights, education, culture, health, social affairs, labor, industry, trade, mining, energy, public works, transmigration, transportation, information, communication, agriculture, plantations, forestry, animal husbandry, marine, and fisheries. Meanwhile, Article 6 of Law Number 39 of 2008 stipulates that each government affairs as referred to in Article 5 paragraphs (2) and (3) does not have to be formed in a separate Ministry.

These articles were then submitted for judicial review at the Constitutional Court by the applicant. The petitioner argued that the placement of DGT as a subordinate or under the Ministry of Finance as contained in the above regulation is contrary to the 1945 Constitution (Detik Finance, 2024).

Judging from the consideration of the Constitutional Judge, the separation of DGT from the Ministry of Finance is still very possible. This is because the judges argue that the separation or merger of DGT from the Ministry of Finance is an open legal policy. Quoting from Hukum Online, open legal policy is a condition where the 1945 Constitution provides a mandate to the legislator to regulate a matter further. In other words, open legal policy is a condition when the 1945 Constitution, or the constitution as the highest legal norm in Indonesia, does not regulate or clearly provide restrictions regarding what and how certain materials must be regulated by law (Hukum Online, 2023).

The term “open legal policy” itself is frequently used in the Constitutional Court Decision as a further implementation of the 1945 Constitution. Furthermore, open legal policy is the legislator's action in determining subjects, objects, acts, events, and/or consequences to be regulated in laws and regulations (Hukum Online, 2023).

The author's opinion regarding the possibility of separating DGT from the Ministry of Finance is also in line with the opinion of senior economist Drajad Wibowo. Drajad argues that open legal policy can be changed at any time, as needed, through the legislative process. Thus, the Constitutional Court's decision does not prohibit the establishment of the State Revenue Agency through legislation (Kumparan, 2024). Furthermore, Drajad argues that the establishment of a tax revenue agency can be done through amendments to the KUP Law. However, the amendment to the formal tax law has the potential to cause chaos. Thus, it would be better to form a new law as the basis for the separation of DGT from the Ministry of Finance.

Based on the above, it is still possible for the legislator to implement open legal policy by establishing a tax revenue agency that is separate from the fiscal policy-making body, in this case, the Ministry of Finance. Moreover, two of the three presidential and vice-presidential candidates plan to make DGT an independent institution to meet the tax revenue target.


Detik Finance. (2024, January 31). MK Tolak Uji Materiil Pemisahan Ditjen Pajak dari Kemenkeu, Ini Respons Anies. Retrieved from Detik:
Hukum Online. (2023, Mei 30). Apa Itu Open Legal Policy? Retrieved from Hukum Online:
Kompas. (2024, January 01). MK Tolak Ditjen Pajak Dipisah dari Kemenkeu. Retrieved from Kompas:,31%2F01%2F2024).
Kumparan. (2024, February 02). MK Tolak DJP-Kemenkeu Dipisah, Prabowo-Gibran Kukuh Buat Badan Penerimaan Negara. Retrieved from Kumparan:

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