Value Added Tax Treatment on Health Services After Tax Regulations Law Harmonization for Government, Health Service Institutions and Recipients

One of the changes related to Medical Health Services after the enactment of the VAT Cluster Law on the Harmonization of Tax Regulation is the provision of VAT exemption facilities for these services. This change is further regulated in Government Regulation no. 49 of 2022. This study aims to examine VAT on Medical Health Services after the enactment of the Law on the Harmonization of Tax Regulations and the policy implications of VAT exemption on medical health services for the community as the end consumer. The research method used in this research is descriptive qualitative with the use of secondary data. The results of this study conclude that service providers are obliged to be confirmed as Taxable Entrepreneur to collect VAT for people who do not use health services not borne by the government. However, Taxable Entrepreneur cannot credit its input tax.


INTRODUCTION
As of October 29, 2021, the Draft Bill on the Harmonization of Tax Regulations (UU HPP) has been ratified by the government and the People's Representative Council (DPR) to become Law Number 7 of 2021 and declared officially to come into effect.The issuance of these laws was to improve welfare, justice, and social development to increase sustainable economic growth and support the acceleration of economic recovery through fiscal consolidation, as well as to improve budget deficits and increase tax ratios through adjustments to Income Tax (PPh) policies.),Value Added Tax (VAT) to arrangements regarding carbon taxes and policies in the form of voluntary disclosure programs (PPS) for taxpayers (Nurrizqi et al., 2022).Lazuardi Widyanto Pratama, Nurcitra Amanda changes to the VAT Law take effect from April 1, 2022, changes to the KUP Law take effect from the date of promulgation, VDP policies apply from January 1, 2022, to June 30, 2022, carbon taxes come into effect April 1, 2022, and changes to the Excise Law effective from the date of promulgation (Ministry of Finance, 2021) The issuance of The Law on Harmonization of Tax Regulations Law changed the provisions regarding Value Added Tax and Sales Tax on Luxury Goods.The Director General of Taxes, Suryo Utomo, revealed three main changes to the VAT Law sector, expanding the tax base through refocusing VAT exemptions and facilities, increasing VAT rates gradually, and implementing the final VAT (Yulianto, 2021).The expansion of the VAT base was due to the suboptimal tax revenues in the VAT sector, which resulted in Indonesia's low tax ratio compared to neighboring countries.
The IMF (2021) stated that one of the reasons for Indonesia's tax revenue not being optimal is the wide range of goods and services that are not subject to VAT and the large number of VAT

The impact of VAT on Health Services After HPP Law for the Health Service Recipients
Apart from shifting several health services which were initially excluded from services subject to VAT to become VAT exempt, there are certain health services which become Taxable Services which are subject to VAT.However, this is only charged for services that are not covered by National Social Health Insurance (BPJS).This service is generally used by middle to upper income people so that this group of people will bear a greater VAT on this service.
H 3 : VAT on Health Services After HPP Law has VAT on Health Services After HPP Law has an

impact for Health Service Recipients
There is only a few research on VAT on health services, especially regarding the VAT facilities.

One of the previous research on VAT on health services is Value Added Tax on Medical Health
Services After the Harmonization of Tax Regulations (Febriana et al., 2022), which discusses the Main Considerations for Imposing VAT on Medical Health Services and the Application of Health Services Tax in Several Other Countries.This research differs from previous studies where this research will discuss the types of health services that get VAT-free facilities and the implementation of VAT exemptions for medical health services to the public as the end consumers.
As for research on VAT facilities after the enactment of the Harmonization of Tax Regulations Law has also been researched several times.Kartiko (2020)

Value Added Tax
In a study by Keen and Lockwood (2010), VAT is known as a 'money machine.'VAT is one of the most significant contributors in terms of tax revenue for a country.VAT Is a tax on consumption paid by the final consumer (OECD).Tait (1988) VAT is an unsatisfactory modification of the sales tax because the tax on the tax occurs when the taxable product moves from the manufacturer to the wholesaler to the retailer.The seller must be the party subject to tax because VAT is a tax on transactions when the seller provides goods and services to the buyer.The seller must register to be confirmed as a taxable entrepreneur with the taxation authority that has a role in collecting VAT.According to Terra & Kajus (2021), Value Added Tax has the following legal characteristics:

The laws and regulations in
1) Indirect Tax Indirect tax defines the bearer of the tax burden, and the person responsible for the tax are different parties.Bearers of the VAT burden referred to in the law are consumers of goods and/or services, but the seller is obliged to pay, deposit, and report VAT to the government/ state.
An objective tax is a tax whose collection considers the value of the tax object.The existence of a tax object determines the obligation to pay VAT.In contrast to subjective income tax, VAT does not consider the taxpayer's condition in collecting it.Therefore, whether taxpayers have high or low income, the imposed VAT rate remains the same as long as they consume goods or services subject to tax.

3) Non-Cumulative Multi Stage Levy
VAT is imposed on every link in the production and distribution chain.This characteristic means that every delivery of goods or services that become the object of VAT, starting from the manufacturer's level to the trader, is subject to VAT.Therefore, entrepreneurs in the production and distribution lines must register with the Tax Service Office (KPP) as a vertical unit of the Directorate General of Taxes to be confirmed as Taxable Entrepreneurs.

4) Calculations use the indirect subtraction method
VAT that the selling Taxable Entrepreneur collects from consumers does not necessarily have to be deposited and paid to the state treasury.This VAT is calculated by subtracting the VAT collected (Output Tax) by the Taxable Entrepreneur from the VAT paid to the buyer (Input Tax).If the value of the Output Tax is greater than the Input Tax, then the difference is deposited to the state, and vice versa; if the Input Tax value is greater, then the PKP Seller can compensate or submit a refund.

5) Tax on consumption
VAT is only imposed on goods/services consumed by individuals and entities in the country.
Therefore goods imported from abroad are subject to the same tax as they will be consumed domestically.Therefore, goods exported are subject to a VAT rate of 0% because they are consumed abroad.

6) Neutral
Nightingale (2002) states that taxes are said to be neutral if they do not affect the economic choices of producers and consumers.VAT is imposed on both the consumption of goods and services.VAT will be collected using the principle of destination.VAT is collected greater where the goods or services are consumed.

7) VAT does not cause double taxation
Even though it is imposed on every line of production and distribution, VAT does not cause

Medical Health Service
Easy access to health services is the right of all Indonesian people as stipulated in the 1945 Constitution of the Republic of Indonesia Article 28H paragraph (1) that everyone has the right to live in physical and spiritual prosperity, to have a place to live, and to get a good and healthy living environment and is entitled to obtain health services.The state is obliged to provide them.
This statement aligns with research conducted by Purnomo et al. (2021), which states that the government must implement a policy to optimize national development, such as adequate health services for the community for higher quality development.
One of the actions taken by the government in realizing this is by implementing a policy of granting VAT facilities exempt from the delivery of certain strategic Taxable Services (JKP).
This provision is regulated in Government Regulation Number 49 of 2022 (PP 49/2022).One of the regulated services is medical health services.Based on this regulation, medical health services that are delivered within the Customs Area or utilized from outside the Customs Area within the Customs Area are exempted from the imposition of Value Added Tax.This also includes services for hospitals, maternity homes, health clinics, first-level medical facilities and advanced-level health services, health laboratories, and sanatoriums as regulated in the provisions of laws and regulations in the health sector.
Robert (1998) defines health services as any service that can contribute to improving health or diagnosing, treating, and rehabilitating sick people and is not necessarily limited to medical services or health care.Health services are often formally organized as well-established institutional systems and organizations to supply services in response to the needs and demands of the population within clear financial and regulatory frameworks.Health services can be in the form of health education, health promotion, and environmental services such as housing, sanitation, etc., which have known health benefits.
Based on Balangan Regent Regulation Number 25 of 2012, Health Services are services to the community that includes examination, treatment, medical treatment, medical rehabilitation, medical consultation, care, and use of health facilities provided by Hospitals or Technical Service Units at the Health Service Together with its network and medical services are defined as compensation for services provided by specialist doctors, expert assistant doctors, general practitioners, dentists, psychologists, and other medical personnel directly to patients in the context of observing, diagnosing, treating, consulting, visits, actions/ maneuvers, medical rehabilitation and or other services.

Types Of VAT Facilities
Facility theory According to Zakiah Daradjat in Hasan (2016), facilities are anything that can facilitate efforts and expedite work to achieve a goal.Furthermore, Suharsimi Arikunto in Hasan (Hasan, 2016) argues that facilities can be interpreted as anything that can facilitate and expedite the implementation of all businesses.According to KBBI, facilities are means to expedite the implementation of functions; convenience.Meanwhile, according to Daradjat (2012)

The
Law on Harmonization of Tax Regulations (UU HPP) has six main discussions, namely General Provisions and Tax Procedures (KUP), Income Tax (PPh), Value Added Tax (PPN), Voluntary Disclosure Program (VDP), Carbon Tax, and Excise.Each scope has a different policy enforcement time.Amendments to the Income Tax Law take effect starting from the 2022 Tax Year, | 281 | Value Added Tax Treatment on Health Services After Tax Regulations Law Harmonization for Government, Health Service Institutions and Recipients Indonesia governing Value Added Tax are regulated in Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on Luxury Goods.This law has been amended several times, namely: 1.The first amendment to Law Number 11 of 1994 took effect from 1 January 1995.2.The second amendment to Law Number 18 of 2000 took effect from 1 January 2001.3. The third amendment with Law Number 42 of 2009 took effect from 1 April 2010.4.The fourth amendment to Law Number 7 of 2021 Harmonization Tax Regulations come into force on 1 April 2022 Vol. 9 (2) 2023: 280-293

The impact of VAT on Health Services After HPP Law for the Government
facilities provided.The expansion has made several types of goods and services that were formerly non-taxable goods/non-taxable services turn into taxable goods/services.This expansion can be reflected in the reduction in the category of goods/services included in Article 4A paragraph (2) and Article 4A paragraph (3) of the VAT law and the addition of goods and services groups that get VAT-free facilities as contained in 16B of the VAT law and more, further explained in Government Regulation Number 49 of 2022 concerning Exemption of VAT and VAT or VAT and Sales Tax on Luxury Goods Not Collected on the Import and/or Delivery of Certain Taxable Goods and/or Certain Taxable Services and/or Utilization of Certain Taxable Services from Outside the Customs Area.One type of goods/service affected by the expansion of the tax base is medical health services which were initially non-taxable services according to the VAT Law.Removing medical health services from the list of services exempt from VAT raises pros and cons among the public.

The impact of VAT on Health Services After HPP Law for the Health Service Institutions
2 : VAT on Health Services After HPP Law has VAT on Health Services After HPP Law has an impact for the Health Service Institutions Value Added Tax Treatment on Health Services After Tax Regulations Law Harmonization for Government, Health Service Institutions and Recipients The research method used in this research is descriptive qualitative.Qualitative methods are used to obtain in-depth data, namely data that contains meaning.The method used is by examining word per word in the recent and previous literature regarding VAT on health services.According to Kuncoro (2009), descriptive qualitative analysis is analyzing problems by describing, comparing and explaining a data or condition so that a conclusion can be drawn.Source of data used in this research is secondary data.from official government websites, legal literature review, journals and news websites.The data analysis technique is using descriptive statistics, namely by describing the data obtained.Description or presentation of data tables and percentages are carried out.This research is based on provisions related to VAT on Medical Health Services namely Law Number 7 of 2021 concerning Harmonization of Tax Regulations and Government Regulation Number 49 of 2022 concerning Exemption of VAT and VAT or VAT and Sales Tax on Luxury Goods Not Collected on Import and/or Delivery of certain Taxable Goods and/or Taxable Services Certain Taxes and/or Utilization of Certain Taxable Services from Outside the Customs Area.In addition, the author compares the provisions contained in the previous law.
examines VAT facilities on produced goods mining or drilling.Nurrizqi et al. (2022) reviewed VAT facilities for meat.Saragih et al. (2022) on educational services.Gultom et al. (2022) on rice.This research is different from various facility studies after Harmonization took effect Tax Regulations, which are focused on medical health service.| 283 | Value Added Tax Treatment on Health Services After Tax Regulations Law Harmonization for Government, Health Service Institutions and Recipients double taxation because VAT is only collected on added value.The tax credit mechanism | 285 | , facilities can facilitate efforts and expedite work to achieve a goal.The word tax facility is generally interpreted as a reduction in tax rates which causes the amount of tax payable to decrease.Article 16B of the VAT Law stipulates that there are two VAT facilities provided by the state, namely VAT that is not collected and is exempt from VAT imposition, either temporarily or permanently.The fundamental difference between the two facilities lies in the crediting of Input Tax related to the delivery that gets the VAT facility.The elucidation of Article 16B of Law Number 42 of 2009, special treatment or facilities in the form of Value Added Tax which is payable but not collected, means that the Input Tax relating to the delivery of Taxable Goods and/or Taxable Services which receive special treatment referred to can still be credited.Thus, Value Added Tax remains payable but is not collected.The following illustrates the calculation of the non-collected and exempted VAT.Table of Comparison of the non-collected and exempted VAT Value Added Tax Treatment on Health Services After Tax Regulations Law Harmonization for Government, Health Service Institutions and Recipients Lazuardi Widyanto Pratama, Nurcitra Amanda Regulation.One of them is services in the field of medical health services, such as general practitioners and specialist doctors.c.Law of the Republic of Indonesia Number 18 of 2000 concerning the Second Amendment to Law Number 8 of 1983 concerning Value Added Tax on Goods and Services and Sales Tax on One type of service that is not subject to VAT is services in the field of medical health services.Furthermore, in Government Regulation of the Republic of Indonesia Number 144 of 2000 concerning Types of Goods and Services Not Subject to Value Added Tax, it is stated that types of services in the field of medical health services include: a. Services of general practitioners, specialist doctors, and dentists; b. veterinary services; c.Health professional services such as acupuncture, dentist, nutritionist, and physiotherapy; d. midwifery and traditional birth services; e. Paramedical and nursing services; And f.Services for hospitals, maternity homes, health clinics, health laboratories, and sanatoriums.d.Law of the Republic of Indonesia Number 42 of 2009 concerning Amendments Third on Law Number 8 of 1983 concerning Added Tax Value of Goods and Services and Sales Tax on Luxury Goods The exclusion of medical health services as a VAT object is regulated in Article 4A paragraph (3).In the explanatory memory, the types of medical health services that are not subject to Law of the Republic of Indonesia Number 11 of 2020 concerning Job Creation Provisions regarding medical health services that are not subject to VAT in the Act Law Number 11 of 2020 is no different from the provisions contained in the previous Law, namely Law Number Value Added Tax is through Government Regulations.However, the explanatory memory of Article 4A states the types of services that are not subject to Value Added Tax by Government | 287 |