BERITA TERKINI
SINGAPORE, DDTCNews - The transformation of Indonesia’s tax judicial institution took centre stage as DDTC presented its views at the Asia Tax Forum (ATF) 2025 in Singapore on Thursday (24/4/2025).
Speaking on the main stage of the ATF 2025, Managing Partner of DDTC Consulting, David Hamzah Damian, outlined the progress of the integration of the Tax Court under a single authority, particularly the shift of its institutional guidance from the Ministry of Finance to the Supreme Court (Mahkamah Agung/MA in Indonesian).
In his presentation titled Managing Disputes at Indonesia Tax Court: Lessons from Statistics, Trends, and Landmark Cases, David emphasized that the integration should be deemed a pivotal momentum to enhance transparency, fairness and legal certainty within the Tax Court.
“Indonesia is currently undertaking the transfer of the Tax Court to the Supreme Court. The transition must be handled with great caution, as it will significantly reshape the domestic landscape of tax adjudication,” he told hundreds of participants attending the Asia Tax Forum 2025 at Marina Bay Sands, Singapore.
He also highlighted a notable trend in the volume of tax disputes filed with the Tax Court, which increased between the mid-2015 and 2020 period, before declining over the past 5 years.
Citing Darussalam (2018), David noted that tax disputes generally exert a negative impact on compliance in 2 key manners. First, the proliferation of disputes generates uncertainty and erodes trust in the tax system (Gangl et al., 2012).
Second, disputes lead to high compliance costs, reflecting the cumulative burden of time, effort and financial resources required (Vaillancourt et al., 2016).
However, he underscored that efforts to safeguard revenues and minimise disputes fall within the domain of the executive, rather than the judiciary. Read, ‘Tax Reform Directions: Enhancing Revenues, Minimising Disputes’.
The delineation of authority between the executive and judicial branches in the context of tax adjudication is expected to be strengthened through the one-roof system of integration of the Tax Court under the Supreme Court.
The transfer of guidance of the Tax Court from the Ministry of Finance to the Supreme Court encompasses 5 key objectives. First, the comprehensive transformation of Indonesia’s tax judicial system.
Second, ensuring the full independence and impartiality of the Tax Court. Third, opening the avenue for cassation against Tax Court decisions.
Fourth, the imposition of appropriate and proportionate penalties. Ideally, this would include the nullification of the 60% administrative penalty imposed on taxpayers whose applications for appeals are rejected or only partially granted.
This is essential to realise a simpler and more cost-efficient tax dispute resolution system. Read ‘Tax Court Integration Marks a Momentum for Enhanced Justice’.
Fifth, enabling 3 categories of parties to exercise litigation before the Tax Court, namely attorneys, comprising tax consultants, advocates and individuals possessing extensive knowledge and expertise in statutory tax laws and regulations.
“We certainly hope that this integration will engender greater legal certainty and fairness for taxpayers,” David remarked.
At the forum, David also introduced DDTC’s latest publication, a book titled Kajian Persiapan Penyatuan Atap Pengadilan Pajak dari Kementerian Keuangan kepada Mahkamah Agung. As the 35th publication of DDTC, this book has been made publicly accessible free of charge.
The book, which elaborates on a study conducted by the Institute for Research and Advocacy for Judicial Independence (Lembaga Kajian dan Advokasi Independensi Peradilan/LeIP in Indonesian), is available in the PDF format and can be freely downloaded and read by the public at the following link. (sap)
*This report was prepared by Managing Partner of DDTC Consulting, David Hamzah Damian, during his attendance at Asia Tax Forum 2025 in Singapore.
