Constitutional Court defends 'controversial' tax tribunal

Rendi A. Witular, The Jakarta Post, Jakarta

The Constitutional Court ruled on Monday that the Tax Tribunal was constitutional, dismissing the petition from a local businessman for the dissolution of the agency.

The ruling came in a four-to-three split with four of the seven judges of the Court maintaining there was no evidence proving that the Law No. 14/2002 on Tax Tribunal was against the 1945 Constitution. Three other judges argued otherwise, calling for a revision of the law.

The four judges said the Tax Tribunal had functioned adequately as an independent court where people could expect a fair trial.

"Claims by the petitioner that the Tax Tribunal could not function as a fair court, and that it closes doors for taxpayers in seeking justice are all inaccurate," said Constitutional Court chief judge Jimly Asshidiqie.

"The petition has been filed because the petitioner cannot understand tax laws and regulations well enough," said Jimly.

The petition was filed by businessman Cornelio Moningka Vega and his father BQ Vega. They claimed that the Tax Tribunal could never be independent since it was dependent on the finance ministry for various aspects. The ministry, for instance, pays the salaries of the tribunal's judges and decides their promotions.

Moreover, they said, unlike other courts, people cannot appeal any decisions made by the tribunal. The decision is considered final.

Under the Tax Tribunal Law, in order to file a suit at the tribunal, taxpayers have first to pay the tax office 50 percent of their arrears. Those who are unable to meet the requirement would mostly compromise with tax officials and pay them bribes to settle the dispute over the amount of their taxes.

Three of the seven judges said in their dissenting opinion that the obligation for taxpayers to pay 50 percent of arrears before going to the Tax Tribunal has denied them the right of getting court justice and defending themselves against possible mistakes made by tax officials.

The judges are Laica Marzuki, Mukhtie Fadjar and Maruarar Siahaan.

The panel of judges noted, however, that the Tax Tribunal should be reformed to comply with Law No. 4/2004 on judicial authority and Law No. 5/2004 on the Supreme Court which grants the Supreme Court the authority to supervise all types of courts.

The panel of judges thus suggested that the supervision of the tribunal should be transferred to the Supreme Court.

BQ Vega, who attended the final session, regretted the Court's decision, saying it would encourage tax officials to continue abusing the tribunal to blackmail taxpayers.

"We regret that most of the judges don't see that the Tax Tribunal Law has become a source of corruption among tax officials," said Vega.

Meanwhile, Directorate General of Taxation Hadi Purnomo welcomed the decision.

"We are grateful for the judges since their decision would ensure the smooth flow of tax revenue to the state," said Hadi.

Hadi also insisted that the government would not transfer the supervision of the Tax Tribunal to the Supreme Court.

"The allegation that the Tax Tribunal is used to extort taxpayers just because it is under the finance ministry is not true. If there is any abuse (of authority), we urge taxpayers to report it to the police rather than spreading rumors," he said.