Bulgaria Constitutional Court repeals 2012 tax law amendments
Bulgaria’s Constitutional Court said on February 6 that the amendments to the tax laws introducing a single taxpayer account, passed in 2012, were unconstitutional.
The changes, passed by the previous legislature, were meant to simplify tax proceedings, but were opposed by the opposition parties, employer associations, trade unions and Bulgaria’s Supreme Bar Council.
The constitutional challenge was submitted by MPs from several parties in opposition at the time, including the two parties that form the current ruling axis, the socialists and the Movement for Rights and Freedoms.
Their main objection was that the recent payments were used – by law – to settle the oldest debts owed to the National Revenue Agency. As a result, payments meant to cover mandatory health care and social insurance contributions in some cases ended up covering other debts and, in some instances, taxpayers were left without health care and social insurance coverage because they had outstanding debts in those areas.
The court ruled that the challenge was justified and that the provisions of the tax amendments breached the rule of law provision in the constitution because the new regulations failed to legislate the subject matter in a clear-cut and non-contradictory fashion. The provisions also breached the right to social benefits and health care, granted by the constitution, the court said.
Following the publication of the court’s decision, Bulgaria’s Finance Ministry said on February 6 that it will prepare, in the coming days, new amendments to the tax laws that will take into account the court’s ruling.
The ministry said that it will draft several alternative bills, to be discussed with employer associations and trade unions next week – but all bills will give taxpayers the right to set which areas should be covered first. The bill agreed on by all three parties will then be submitted to the National Assembly, the ministry said.
Current payments on income tax (on which individuals can receive a five per cent discount if the funds are paid by February 10) and value-added tax payments due before February 14 will be paid under the single-account provisions – even though the court declared such provisions unconstitutional, the court’s decision has yet to go into force, the ministry said.
(Photo: Clive Leviev-Sawyer)