Constitutional Court Holds Hearing on DGT's Separation from the Ministry of Finance

JAKARTA. The Constitutional Court (MK) has been urged to separate the Directorate General of Taxes (DGT) from the Ministry of Finance, as per the judicial review request registered under number 155/PUU-XXI/2023.

The Constitutional Court held its first hearing on Tuesday (12/12) which was attended by the applicant, in this case Sangap Tua Ritonga, who is a tax consultant represented by Pither Ponda Barany.

The content of the petition questions Article 5 and Article 15 of the Law on the Ministry of State because they are considered contrary to the 1945 Constitution.

In detail, Article 5 paragraph (2) of the State Ministry Law reads:
"Government affairs as referred to in Article 4 paragraph (2) letter (b) include religion, law, finance, security, human rights, education, culture, health, social affairs, labour, industry, trade, mining, energy, public works, transmigration, transportation, information, communication, agriculture, plantations, forestry, animal husbandry, marine and fisheries."

Meanwhile, Article 15 of the State Ministry Law reads:

"The total number of Ministries as referred to in Article 12, Article 13, and Article 14 is a maximum of 34 (thirty-four)."

Separate Nomenclature

According to the applicant, Article 5 or (2) is considered unconstitutional because it does not include tax as one of the nomenclatures. Thus, tax affairs must be separate from financial affairs.

The third amendment to the 1945 Constitution applies, the financial nomenclature and tax nomenclature are clearly separated. Among others, Article 23 of the 1945 Constitution regulates the nomenclature of taxes and Article 23A regulates the nomenclature of taxes.

For this reason, in his request, the applicant for judicial review, Sangap Tua Ritonga, requested the Constitutional Court to declare Article 5 paragraph (2) of the Law on the Ministry of State unconstitutional, as long as it does not include the word tax, as a separate nomenclature from the financial nomenclature.

Affecting Tax Targets

Apart from that, the applicant also argued that mixing the nomenclature of finance and tax means uniting the treasury function and the state revenue function in one nomenclature. 

This is seen to have the potential to impede policymaking. For example, in the preparation of tax revenue targets that are not based on calculations such as the potential tax gap that has not been reported by taxpayers.

In addition, the separation of DGT from the Ministry of Finance is also expected to improve the governance of the tax authority. (ASP/KEN)