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Jakarta, Ideatax -- Thursday, May 26, 2023, the Constitutional Court finally partially granted the petition for judicial review of Law Number 14 of 2002 concerning the Tax Court. Through Decision Number 26/PUU-XXI/2023, the Constitutional Court declared that Article 5 of the Tax Court Law is contrary to the 1945 Constitution.
Furthermore, the Chairman of the Constitutional Court, Anwar Usman, stated that as long as the phrase Ministry of Finance in Article 5 paragraph (2) of Law No. 14/2002 on the Tax Court is contrary to the 1945 Constitution and has no binding legal force as long as it is not interpreted as the Supreme Court which is gradually implemented no later than December 31, 2026 (detiknews, 2023).
As is known, Article 5 of the Tax Court Law regulates that the technical judicial guidance of the Tax Court is performed by the Supreme Court, while the organizational, administrative, and financial guidance of the Tax Court is performed by the Ministry of Finance. Furthermore, Article 5 of the Tax Court Law also regulates that the dualism of guidance as mentioned above, must not reduce the freedom of Judges in examining and deciding tax disputes.
With the decision of the Constitutional Court number 26/PUU-XXI/2023, in the future the technical, organizational, administrative, and financial guidance of the Tax Court will be in the hands of the Supreme Court. According to the Constitutional Court, there needs to be a one-stop system in the development of the Tax Court without interference from other institutions.
History of the Tax Court
Historically, the Tax Court has existed since the Dutch era. Through Staatsblad number 707/1915, the Dutch East Indies Colonial government created the raad van Belastingzaken or tax affairs council. This institution was responsible for resolving tax disputes that arose at that time. Furthermore, this institution consisted of elements of government, businessmen and tax experts with the Dutch East Indies Ministry of Finance as its chairman (Katadata, 2022).
In 1927, the Dutch East Indies Government improved the Tax Affairs Council. Through Staatsblad No. 29/1927, the Dutch East Indies government appointed the deputy chief justice of the Supreme Court as chairman of the Tax Affairs Council. In addition, this Staatsblad also provided further arrangements regarding the procedure for appeals (Ordonantie tot Regeling van het Beroep in Belastingzaken).
After Indonesia's independence in 1945, the Indonesian government issued Law No. 5/1959 on the Amendment of Regeling Van Het Beroep In Belastingzaken. Through this law, the Indonesian government changed the term Raad van Belastingzaken to Tax Advisory Council. There were not many substantial changes in this law in relation to the 1927 ordinance other than the change of name and term (Katadata, 2022).
In addition to having the authority to examine and decide on central tax disputes, this advisory also has the authority to examine and decide local tax disputes. However, the use of the name Tax Advisory Council often leads to misperceptions.
This is because the use of the word consideration is often associated with the authority to provide consideration without the authority to decide cases. Whereas, in reality, the Tax Advisory Council also has the authority to decide tax disputes.
Therefore, in 1997, the legislator issued Law No. 17/1997 on the Tax Dispute Resolution Agency (hereinafter referred to as BPSP). With the issuance of this law, the Tax Advisory Council was officially abolished and replaced with BPSP.
In general, this agency is responsible for examining and deciding tax disputes as well as customs and excise disputes. BPSP is an authority that is not possessed by the general court or the state administrative court.
Despite having the authority to examine and decide tax and customs and excise disputes, this agency is not a judicial agency. This is because this agency is not led by a judge, but by a chairman.
In addition, Article 5 of Law No. 17/1997 also regulates that the organizational, administrative and financial guidance of BPSP is performed by the Ministry of Finance. Moreover, the regulation also regulates that organizational and financial guidance by the Ministry of Finance must not reduce the Members' freedom in examining and deciding tax disputes.
The authority to examine and decide tax law cases by BPSP members raises a dilemma. This is because the authority to decide and examine tax disputes should be in the hands of judges, not in the hands of the chairman and members of an administrative institution such as BPSP. As a result, BPSP decisions are often considered as quasi-judicial decisions that do not reflect a fair trial.
On this basis, the legislator replaced BPSP with the Tax Court. Through Law No. 14 of 2002 on the Tax Court, the legislator regulates that the judicial agency authorized to exercise judicial power over tax disputes is the Tax Court. Furthermore, the Tax Court Law also regulates that the composition of the Tax Court consists of a chairman, judges, secretary, and clerk.
As previously mentioned, the Tax Court Law regulates that the judicial technical development authority of the Tax Court is vested in the Supreme Court, while the organizational, administrative, and financial development authority is vested in the Ministry of Finance.
Through Constitutional Court Decision Number 26/PUU-XXI/2023, the Constitutional Court transferred the organizational, administrative, and financial development authority of the Tax Court from the Ministry of Finance to the Supreme Court. The hope is to create a fair resolution of tax disputes with procedures and processes that are fast, cheap, and simple as stated in the preamble of Law No. 14 of 2002.
Related Regulations
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Staatsblad number 707/1915 about raad van Belastingzaken
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Law No. 5 of 1959 on the Amendment Regeling Van Het Beroep In Belastingzaken
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Law number 17 of 1997 concerning tax dispute resolution bodies
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Law No. 14 of 2002 on the Tax Court
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Constitutional Court decision number 26/PUU-XXI/2023
References
detiknews. (2023, Mei 26). Tok! MK Geser Pengadilan Pajak dari Kemenkeu ke MA. Retrieved from netiknews: https://news.detik.com/berita/d-6738443/tok-mk-geser-pengadilan-pajak-dari-kemenkeu-ke-ma
Katadata. (2022, April 22). Menyelami Sejarah Lembaga Peradilan Bidang Pajak di Indonesia. Retrieved from Katadata: https://katadata.co.id/agungjatmiko/ekonopedia/6254f8351ea93/menyelami-sejarah-lembaga-peradilan-bidang-pajak-di-indonesia
