Juridical Analysis of Non-Effective Taxpayer Determination Disputes: Study of Tax Court Ruling Number 009544.99/2020/Pp/M.Ib 2020 and The Ruling of The Supreme Court Number 4910/B/Pk/Pjk/2022

Abstract

This study analyzes the resolution of disputes regarding the determination of non-effective taxpayers through a case study of the Tax Court Decision Number 009544.99/2020/PP/MIB of 2020 and the Supreme Court Decision Reg. Number 4910/B/PK/Pjk/2022 of 2022. Tax is a crucial source of state revenue, and uncertainty in the status of non-effective taxpayers can significantly impact the effectiveness of tax administration and state revenue. This research employs a normative legal approach, with an in-depth analysis of relevant legal documents, tax regulations, and the legal considerations taken by the judges. The findings indicate that the Supreme Court rejected the petition for judicial review submitted by the Directorate General of Taxes and upheld the Tax Court's decision that annulled the business turnover correction amounting to IDR 270,659,270,000, stating that Mrs Sri Roosmini is entitled to be designated as a non-effective taxpayer as she has met the stipulated requirements. The judges' considerations are based on justice and legal certainty, prioritizing substance over administrative formalities. This ruling underscores the importance of harmonizing tax obligations with taxpayers' rights while encouraging tax authorities to be more meticulous in evaluating non-effective taxpayer status applications, which is expected to enhance voluntary tax compliance. This study also offers recommendations for improving tax administration procedures in the future.