It is very clear that the Tax Amnesty law did not harm the interests of the poor but benefited the people in general."Jakarta (ANTARA News) - The Indonesian government is currently facing a legal battle at the Constitutional Court (MK) over its tax amnesty program, which it began enforcing on July 15, 2016.
The aim of the amnesty program is to attract the return of thousands of trillions of rupiah in assets held overseas by Indonesian businessmen who have avoided paying taxes.
After the draft was endorsed by the House of Representatives (DPR) on June 28, 2016, Law No. 11/2016 on Tax Amnesty was issued by the government on July 1, 2016. The tax amnesty program will continue for nine months, from July 15, 2016 until March 31, 2017.
However, the Indonesian Peoples Struggle Union, One Justice Foundation, three trade union organizations and an Indonesian citizen, Leni Indrawati, filed a petition on July 13, 2016 with the MK, asking for a judicial review of the law.
All petitioners have stated that Law No. 11/2016 is discriminatory in nature against all Indonesian people because it gives an impression of protecting tax evaders from paying taxes that were mandatory.
They further asked the MK to comply with their proposals by stating that Article 1, point 1; Article 3 point 3; Article 4; Article 21 point 2; and Article 23 point 2 of Law No.11/2016 have no legal basis and are in violation of the 1945 Constitution.
On the other hand, the House of Representatives opined that provisions, as regulated in Law No.11/2016 on Tax Amnesty, do not harm the constitutional rights of the people, as argued by the petitioners.
"The DPR is of the view that a quo principle does not run counter to Article 23, Article l 24, Article 27, Article 28D and Article 28F of the 1945 Constitution, and it does not harm the constitutional rights of the petitioners," said Melchias Marcus Mekeng, chairman of Commission XI on financial affairs of the DPR, speaking at the MK building on Tuesday.
Mekeng made the remarks as part of explanations during a judicial review hearing on the tax amnesty law at the MK building on Tuesday (September 20).
Referring to the argument of the petitioners that the a quo principle is discriminatory, the legislator explained that the a quo provision, in fact, provides a just and non-discriminatory treatment because it is applied to all taxpayers.
"The law regulates that all taxpayers have the same rights to tax amnesty, except taxpayers who are under examination and investigation (by law enforcers)," said Mekeng.
According to Mekeng, the tax amnesty law applies the same principles equally to all taxpayers to obtain tax amnesty and pay their obligations, including tax penalties.
Therefore, the DPR rejects the request of the petitioners, with regard to the a quo provision, because the House believes that it did not violate the constitutional rights of the petitioners.
During the MK hearing on Tuesday, the government rejected the judicial review filed by the petitioners, whom the government said had no legal standing regarding the case.
"The government asks the MK panel of judges to accept the Presidents explanation and state that the petitioners have no legal standing, and reject all requests of the petitioners, or state that all requests of the petitioners could not be accepted," said Finance Minister Sri Mulyani, who represented the government during the MK court hearing on Tuesday.
In her explanation, Sri Mulyani said the issuance of the Tax Amnesty law is in accordance with the constitutional rights of the government in the framework of giving priority to the national interest and the interest of the entire Indonesian people.
"It is very clear that the Tax Amnesty law did not harm the interests of the poor but benefited the people in general," Sri Mulyani stated.
Minister Sri Mulyani pointed out that the tax amnesty law offers at least three benefits in the national interest. The first benefit is that the funds obtained through the tax amnesty program could be used to boost the countrys economy.
"The redemption money obtained through asset repatriation could be used directly for national development," the minister added.
The third benefit of the policy will be the support to sustainable economic development which will eventually boost economic activities and raise peoples purchasing power.
"So, it is clear that this law by no means causes any constitutional damage to any party," she stressed.
In the meantime, the Indonesian Trade Unions Confederation (KSPI) said it regretted the explanations given by the government during the court session at the Constitution Court (MK).
KSPI President Said Iqbal stated that his confederation was unhappy with the governments explanations that petitioners of the Tax Amnesty Law have no legal basis for filing a judicial review with the MK.
Said was of the view that the governments explanation on the tax amnesty policy would hurt laborers, who pay taxes. The law also goes against the interests of taxpayers, who pay taxes regularly based on the Constitution.
"The policy disadvantages its workers, who regularly file a report on their annual taxes, and their salaries are deducted directly. The government also urged the court to declare that the legal basis of the (the petitioners) is not legitimate. This is hurtful," Said noted after attending the MK hearing.
Said noted that the governments explanations during the MK hearing were as if it does not represent its people. "We are firm in our opinion that the amnesty law is against the 1945 Constitution."
At least Rp4,000 trillion worth of funds stashed overseas are expected to be declared and Rp1,000 trillion of these are expected to be repatriated and invested in the country. The government is optimistic of earning Rp165 trillion from the tax amnesty program in the form of asset redemption and declaration fees.
(T.A014/INE/KR-BSR/F001)
Reporter: Andi Abdussalam
Editor: Priyambodo RH
Copyright © ANTARA 2016
