Redirecting 2% of income tax – unconstitutional
On 13 February 2014 the Constitutional Court delivered its judgment on the constitutionality of the paragraph (7) of the Article 88 of Tax Code No. 1163-XIII of 24 April 1997 (Complaint No. 5a/2014).
Circumstances of the case
At the origin of the case lies the application submitted to the Constitutional Court on 3 February 2014 by the MPs, Messrs Mihai Ghimpu, Valeriu Munteanu, Gheorghe Brega and Mrs Corina Fusu.
By para. (7) of the Art. 88 of the Tax Code, included by Law No. 324 of 23 December 2013, was established the right of the individuals to dispose on the destination of the share up to 2% of income tax from salary, by directing this amount to non-commercial organizations of public utility and religious institutions, the list of which was to be approved by the Government.
The authors of the application alleged that the challenged provisions are violating the procedure of working out the national public budget and the principle of local autonomy, being contrary to the Articles 6, 72, 74, 109, 130 and 131 of the Constitution, as well as to the provisions of the international acts.
The Constitutional Court ruled on the application in the following composition:
Mr Alexandru TĂNASE, President,
Mr Aurel BĂIEŞU,
Mr Igor DOLEA,
Mr Victor POPA,
Mr Petru RĂILEAN, judges
Conclusions of the Court
Hearing the reasoning of the parties and examining the case files, the Court held that, under Article 131 para. (4) of the Constitution, any legislative initiative or amendment, which entails the increase or the decrease of the budgetary revenues or loans, as well as the increase or curtail of the budgetary expenditures shall be adopted only following an approval of the Government.
The Court held that, on 23 December 2013, the Parliament adopted the challenged provisions without the prior approval of the Government.
The Court emphasized that, under the constitutional norm, the approval has to be expressed by the Government, as a collegial body, and not as a member of the executive.
The Court held that the Government can not disclaim its right / constitutional liability, including the express consent / rejection on legislative initiatives or amendments with a budgetary impact. Therefore, the Court held that the lack of a prior consent of the Government on the amendments that are determining the increase or decrease of the budgetary revenues and expenditures represents an omission. The Court found that this omission has occurred as a result of the failure to carry out the provisions of the Article 131 para. (4) of the Constitution, wherefore the norms thus adopted are unconstitutional.
Judgment of the Court
Starting from the reasoning invoked above, the Constitutional Court:
- upheld the application of the MPs, Messrs Mihai Ghimpu, Valeriu Munteanu, Gheorghe Brega and Mrs Corina Fusu on the constitutionality of some financial provisions;
- declared unconstitutional the paragraph (7) of the Article 88 of Tax Code No. 1163-XIII of 24 April 1997.
The Judgment of the Constitutional Court is final, cannot be appealed, shall enter into force on the date of passing, and shall be published in the Official Gazette of the Republic of Moldova.