Near the end of his presidential term, Jokowi issued a new regulation on 22 November 2023, i.e., Government Regulation No. 54 of 2023 on Termination of Excise Crimes Investigation (PMK 54). The core regulation of this PMK 54 is that certain types of excise crimes can be substituted with payment of administrative fines (in the amount of four times of the payable excise tax). The eligible crimes are the excise crimes that are regulated under Articles 50, 52, 54, 56, and 58 of the Excise Law.
Applicable Excise Crimes
PMK 54 states that only some excise crimes are eligible for the fine redemption, i.e.:
- Article 50
Performing manufacture, storage, or import activities of excise goods with the intention of not paying excise tax.
- Article 52
Releasing excise goods from the factory or storage facility without taking into account the regulations under Excise Law with the intention of not paying excise tax.
- Article 54
Offering, delivering, selling, or providing for sale excise goods that are not packaged for retail sale, affixed with excise stamp, or affixed with a sign of payment of excise taxes.
- Article 56
Hoarding, saving, owning, selling, trading, obtaining, or giving excise goods that are known or should have been expected from crimes.
- Article 58
Offering, selling, or delivering unrightful excise stamp or sign of payment of excise taxes.
Redemption Procedures
The steps for a suspect to be granted a redemption are as follows:
- The investigator informs the suspect that they may submit a request for termination of investigation by paying an administrative fine. The request should be submitted to the Minister of Finance (Minister) or the relevant authority.
- The Minister reviews the request. If the request fulfills the requirement, the Minister or the relevant authority issues the approval to the suspect by also quoting the total amount of the administrative fine that must be paid by the suspect and the deadline for such payment. If the request does not fulfill the requirement, the Minister issues a rejection letter stating the reasons for the rejection.
- The suspect must pay the administrative fine to the designated bank account and deliver evidence of such payment and a guilty plea statement to the Minister.
- The Minister or the relevant authority delivers the request to terminate the investigation to the District Attorney within five business days from the receipt of the evidence of payment.
- The District Attorney reviews the request to terminate the investigation and can either:
- Approve the request,
- Request the Minister to complete the supporting documents, or
- Reject the request.
Commentary
It is understood that the purpose of PMK 54’s issuance is to boost State income – by the payment of the fine. However, some question the efficacy of the regulation and state that the issuance of this regulation may have a negative impact on the enforcement of justice in Indonesia. The people with negative opinions on the issuance of this regulation mostly question the validity of this regulation as this regulation is lower in ranking compared to the law yet it contradicts the law by creating lesser sanctions (administrative fines as opposed to criminal sanctions). As this regulation is still relatively new and further implementing regulations are expected to be issued, we still need more time to evaluate the benefit of this regulation to the State’s income. Since there are quite a few negative opinions on this regulation, it is very likely that they may also challenge the validity of PMK 54 by filing a lawsuit to the Constitutional Court.
For Further Information, Please Contact:
MetaLAW, Legal Consultant, Jakarta, Indonesia
general@metalaw.id
