Reconstruction of Indonesian Tax Law Based on The Principle Of Distributive Justice To Establish A Welfare State In The Framework of The Rule of Law
DOI:
https://doi.org/10.38035/jlph.v6i2.2670Keywords:
Tax Justice; Welfare State; Regressive Taxation; Law Enforcement; Fiscal TransparencyAbstract
Amidst efforts to establish a welfare state, the current tax system actually creates economic injustice through the dominance of regressive indirect taxes, asymmetric law enforcement, and a transparency deficit that weakens public legitimacy. This study uses a dogmatic research method and deeply analyzes the vertical and horizontal consistency between legal norms and tax practices. The study was conducted using a textual and conceptual approach, as well as an assessment of the harmonization of various related regulations. The results show a disharmony between the constitutional mandate demanding distributive justice and consumption tax policies and weak enforcement against corporate tax avoidance. This phenomenon is exacerbated by limited transparency and accountability in the use of tax funds, leading to a crisis of public trust. The paper recommends a comprehensive reconstruction of the tax system, including strengthening progressive taxation, equal law enforcement, increasing fiscal transparency, harmonizing regulations, and adopting international practices, so that the tax system can function optimally as an instrument for redistributing welfare in accordance with the principles of the Pancasila rule of law.
References
Abdullah, B., Melisa, AlHafiz, H., Patimah, S., Juwita, M., Marissa, D., Amelia, N., Afriza, A., Syahputri, T., Hadinata, M., Manaf, I.A., Qawi, I., & Tarigan, JS (2025). Adjustment of the 12% VAT Rate from a Tax Law Perspective: Implications for Legal Certainty and Fiscal Justice. Innovative: Journal of Social Science Research , 5 (4). https://j-innovative.org/index.php/Innovative/article/view/20567
Aditama, MA (2025, September 10). Tax Policy and Social Contracts . Pratamainstitute. https://pratamainstitute.com/kebijakan-pajak-dan-kontrak-sosial
Adiyanta, AKW (2025). Assessing the Necessity of GAAR In Indonesia: A Comparative Evaluation of Global GAAR Frameworks and the Development of an Effective Statutory Model to Mitigate Tax Avoidance. Journal of Economics, Finance And Management Studies , 08 (02). https://doi.org/10.47191/jefms/v8-i2-57
Andriyani, T. (2025, July 18). Government Asked to Reorganize Tax System to Support National Investment Targets . UGM.ac.id. https://ugm.ac.id/id/berita/pemerintah-diminta-menata-ulang-sistem-perpajakan-untuk-topang-target-investasi-nasional/
Anindya, P. (2025). Tax Avoidance and Its Prevention Policies in Formal Tax Law in Indonesia. Widya Yuridika , 8 (2). https://doi.org/10.31328/wy.v8i2.6654
Annur, CM (2024, March 13). VAT Rate to 12% Starting 2025, Lower Middle Class Most Affected . Katadata. https://databoks.katadata.co.id/ekonomi-makro/statistik/3f51f4922d76e6f/tarif-ppn-jadi-12-mulai-2025-kelas-menengah-bawah-paling-terdampak
Appiah, T., Domeher, D., & Agana, J. A. (2024). Tax Knowledge, Trust in Government, and Voluntary Tax Compliance: Insights From an Emerging Economy. Sage Open , 14 (2). https://doi.org/10.1177/21582440241234757
Aprilia, WE (2025). Reforming Tax Rights in the Digital Economy with a Legal Analysis of the Implementation of Pillar 1 of the OECD/G20 in Global and National Contexts. Journal of Tax Applications , 6 (1). https://doi.org/10.29303/jap.v6i1.106
Ardian, RD, Fadholi, S., & Rini, S. (2025). Tax Law Reform and Fiscal Justice in Indonesia: A Legal Approach Toward the Sustainable Development Goals. Law Journal In Concreto , 4 (2). https://doi.org/10.35960/inconcreto.v4i2.1832
Asmarani, NGC (2021, May 31). What is Ability to Pay? DDTCNews. https://news.ddtc.co.id/literasi/kamus/30216/apa-itu-ability-to-pay
Aulia, A., Maisaroh, S., Ananta, AF, & Pangestoeti, W. (2025). The Impact of a 12% VAT Increase on State Revenue and Public Welfare. Amendemen: Indonesian Journal of Defense, Politics, and Law , 2 (1). https://doi.org/10.62383/amandemen.v2i1.773
Budianto, A. (2022). Legal Research Methodology Repositioned in Research on Social Science. International Journal of Criminology and Sociology , 9 . https://doi.org/10.6000/1929-4409.2020.09.154
Budiman, IF, & Gumawang, IR (2025). Analysis of the Influence of Tax Compliance Level and Number of Formal Workers on Income Tax (PPh) Revenue in Indonesia. Journal of Tax Applications , 6 (1). https://doi.org/10.29303/jap.v6i1.95
Budiman, S., Ginting, B., Maharani, U., & Lubis, AA (2020). Analysis of Tax Law on Property Investment Related to Tax Revenue in Medan City. ARBITER: Scientific Journal of Master of Law , 2 (1). https://doi.org/10.31289/arbiter.v2i1.99
Closs-Davies, S. C., Bartels, K. P. R., & Merkl-Davies, D. M. (2024). How tax administration influences social justice: The relational power of accounting technologies. Critical Perspectives on Accounting , 100 . https://doi.org/10.1016/j.cpa.2024.102758
Cowx, M., & Kerr, J. N. (2024). The general anti‐avoidance rule. Contemporary Accounting Research , 41 (3). https://doi.org/10.1111/1911-3846.12963
Dagan, T. (2024). Tax and Globalisation: Toward a New Social Contract. Oxford Journal of Legal Studies , 44 (3). https://doi.org/10.1093/ojls/gqae010
Diamond, P., & Saez, E. (2011). The Case for a Progressive Tax: From Basic Research to Policy Recommendations. Journal of Economic Perspectives , 25 (4). https://doi.org/10.1257/jep.25.4.165
Djatmiko, S., & Dharmasetya, L. (2025). Tax Law Supervision and Enforcement of Double Taxation Avoidance Practices (Case Study of PT Asian Agri Group). Postulat , 3 (2). https://doi.org/10.37010/postulat.v3i2.2018
Eriranda, AO, Rahmad.S, F., & Kusdarini, E. (2024). The Meaning of Welfare State Reviewed from the Implementation of Article 34 Paragraph (1) of the 1945 Constitution. IUS QUIA IUSTUM Law Journal , 31 (3). https://doi.org/10.20885/iustum.vol31.iss3.art4
Firstiyanendro, L., & Utomo, DC (2025). The Concept of Participatory Budgeting as an Effort to Increase Budget Transparency and Accountability. Locus Journal of Research and Community Service , 4 (9). https://doi.org/10.58344/locus.v4i9.4259
Hainorrahman, & Futaki, SS (2024, December 23). The 12 Percent VAT Increase and the Irony of Tax Justice . timesindonesia. https://timesindonesia.co.id/kopi-times/522393/kenaikan-ppn-12-persen-dan-ironi-keadilan-pajak
Handayani, EDW, & Arwanto, B. (2025). Application of the Principle of Justice in the Settlement of Value Added Tax Disputes in the Tax Court. Hukum Dinamika Ekselensia , 7 (3). https://journalversa.com/s/index.php/hde/article/view/4548
Hasan, H. (2020). The Principle of Equal Legal Status in Tax Dispute Resolution in Indonesia. Journal of Legal Ideas , 2 (1). https://doi.org/10.31849/jgh.v2i01.8235
Hidayat, S. (2019). Corporate Criminalization Related to Transfer Pricing in the Tax Sector. Rechtidee , 14 (1). https://doi.org/10.21107/ri.v14i1.5475
Hukumonline. (2024, July 25). The Text and Meaning of Article 33 of the 1945 Constitution . Hukumonline. https://www.hukumonline.com/berita/a/bunyi-dan-makna-pasal-33-uud-1945-lt66a1c0b348b25/
IMF. (tt). Code of Good Practices on Fiscal Transparency . IMF. Retrieved October 29, 2025, from https://www.imf.org/external/np/fad/trans/code.htm
Khifni, M., Widiarty, WS, & Butarbutar, S. (2025). Legal Certainty in Enforcing Tax Justice in Transfer Pricing Disputes at the Tax Court. Journal of Social Technology , 5 (4). https://doi.org/10.59188/jurnalsostech.v5i4.32068
Mahpudin, E. (2024). Digital tax reform in Indonesia: Perspective on tax policy development. Journal of Infrastructure, Policy and Development , 8 (8). https://doi.org/10.24294/jipd.v8i8.7032
Mariani, & Kiswara, E. (2020). Fiscal Transparency Analysis of Tax Expenditure Reports in Indonesia. Diponegoro Journal of Accounting , 9 (4). https://ejournal3.undip.ac.id/index.php/accounting/article/view/29079/0
Masputra, MHC (2025, August 27). The Taxes We Pay, the Trust We Pawn . MARINews. https://marinews.mahkamahagung.go.id/artikel/pajak-yang-kita-bayar-kepercayaan-yang-kita-gadaikan-0wo
Muttaqien, F., & Purwati, A. (2025). Law Enforcement Strategy for Corporate Tax Evasion through Offshore Finance and Tax Havens. Sentri: Scientific Research Journal , 4 (8). https://doi.org/10.55681/sentri.v4i8.4449
Nafisyah, AH (2025, October 1). Tax Hikes, Trust Declines: Wrong Figures or Government Fault? Ortax.org. https://ortax.org/raik-pajak-turun-kepercayaan-salah-angka-atau-salah-pemerintah
Nurakhmadi, DA, Rahmawan, TI, & Suhendro, S. (2024). Optimizing Public Participation in Budgeting. Civilization Journal of Law and Society , 3 (1). https://doi.org/10.59001/pjls.v3i1.173
Oktavira, BA (2022, March 17). The Meaning of the Principle of Equality Before the Law and Examples . Hukumonline. https://www.hukumonline.com/klinik/a/makna-asas-iequality-before-the-law-i-dan-contohnya-lt6233304b6bfba/
Purendka, F., Alvia, L., Metalia, M., & Desriani, N. (2025). The Influence of Website-Based Corporate Information Disclosure Levels on Tax Avoidance Behavior of Public Companies in Indonesia. Journal of Economics, Accounting, and Taxation , 2 (1). https://doi.org/10.61132/jeap.v2i1.869
Rahmawati, YR (2024). Social Justice in Progressive Taxation: An Analysis of the Impact of the Tax System on the Tax Burden of the Rich and Poor in Indonesia. Restitution: Journal of Taxation Research , 3 (2). https://doi.org/10.33096/restitusi.v3i2.969
Rudalamun, MR, & Noch, MY (2023). Comparative Analysis of Tax System Effectiveness in Developed and Developing Countries. Golden Ratio of Taxation Studies , 3 (2). https://doi.org/10.52970/grts.v3i2.626
Ruslina, E. (2012). The Meaning of Article 33 of the 1945 Constitution in the Development of Indonesian Economic Law. Constitutional Journal , 9 (1). https://ejournal.mahkamahkonstitusi.go.id/index.php/jk/article/view/124
Safruddin. (2023, April 29). Tax Justice for Workers . Pajak.go.id. https://www.pajak.go.id/id/artikel/keadilan-pajak-bagi-pekerja
Simanjuntak, SDA (2025, September 2). Legitimacy of Tax Collection in the Spotlight Amidst a Wave of Protests . bisnis.com. https://ekonomi.bisnis.com/read/20250902/259/1907881/legitimasi-pungutan-pajak-jadi-sorotan-di-tengah-gelombang-aksi-protes
Smits, J. M. (2017). What Is Legal Doctrine? In R. van Gestel, H.-W. Micklitz, & Rubin Edward L. (Ed.), Rethinking Legal Scholarship (pp. 207–228). Cambridge University Press. https://doi.org/10.1017/9781316442906.006
Suasa, MDS, Arjaya, IM, & Seputra, IPG (2021). The Principle of Fairness in Tax Collection in Government Regulation No. 23 of 2018 concerning Income Tax. Journal of Legal Preferences , 2 (1). https://doi.org/10.22225/jph.2.1.3042.6-10
Sulistyowati, Chusnah, FN, Supriati, D., Rusli, D., & Pohan, TA (2024). Dynamics of corporate tax avoidance: Examining the influence of political connections, institutional ownership, and independent commissioners. Journal of Accounting and Management , 21 (2). https://doi.org/10.36406/jam.v21i2.1642
Supriyanto, BE (2024, December 30). Transparency and Accountability in the Management of Transfer Funds to Regions . djpb.kemenkeu.go.id. https://djpb.kemenkeu.go.id/kppn/watampone/id/profil/309-artikel/3799-transparansi-dan-akuntabilitas-pengelolaan-dana-transfer-ke-daerah.html
Suryana, AB (2023, June 14). Justice and Preventing Corporate Tax Avoidance . Pajak.go.id. https://pajak.go.id/id/artikel/keadilan-dan-mencegah-penghindaran-pajak-badan
Suryantar, IG (2024, March 21). Uncovering Gaps in the Tax Gap . Pajak.go.id. https://stats.pajak.go.id/index.php/id/artikel/menguak-celah-dalam-tax-gap
Syahril, Muh. AF, & Hasan, H. (2024). A Comparative Research on the Effectiveness of Progressive versus Proportional Tax Systems in Enhancing Social Justice. Administrative and Environmental Law Review , 5 (2). https://doi.org/10.25041/aelr.v5i2.3479
Tambunan, MRUD (2021). Adopting the BEPS Inclusive Framework in Indonesia: Taxation Issues and Challenges in a Digital Era. BUSINESS & BUREAUCRACY: Journal of Administrative and Organizational Sciences , 27 (3). https://doi.org/10.20476/jbb.v27i3.11829
Tiranda, YM (2017). Implementation of the Welfare State Principles Based on the Rechtsstaat in Realizing Pancasila-Informed Tax Law. Lex Publica , 4 (2). https://journal.appthi.org/index.php/lexpublica/article/view/79
Wijayanto, H. (2015). Transparency of Regional Revenue and Expenditure Budgets Through the Implementation of E-Budgeting. The Indonesian Journal of Public Administration (IJPA) , 1 (1). https://doi.org/10.52447/ijpa.v1i1.79
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Ery Pamungkas, Tetti Samosir, Fontian Munzil, Maslihati Nur Hidayati
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish their manuscripts in this journal agree to the following conditions:
- The copyright on each article belongs to the author(s).
- The author acknowledges that the Journal of Law, Poliitic and Humanities (JLPH) has the right to be the first to publish with a Creative Commons Attribution 4.0 International license (Attribution 4.0 International (CC BY 4.0).
- Authors can submit articles separately, arrange for the non-exclusive distribution of manuscripts that have been published in this journal into other versions (e.g., sent to the author's institutional repository, publication into books, etc.), by acknowledging that the manuscript has been published for the first time in the Journal of Law, Poliitic and Humanities (JLPH).
