The National Liberal Party (PNL) submitted on Monday a request to the Ombudsman to notify the Constitutional Court on the unconstitutionality of the GEO amending the Tax Code. Ombudsman Victor Ciorbea (photo) stated that the request will be “seriously” analyzed and he said that the institution will receive other requests on the same issue in the coming days, for sure.
Liberals claim in their request that the Government’s approach is unconstitutional because several articles of the Romanian Constitution, as well as the treaties to which Romania is a party have been breached.
“By the fiscal measures introduced by GEO no.79/2017, the budget deficit will substantially grow in Romania in 2018, even more than 4% of the GDP, as a consequence of the significant increase of the salaries in the public administration. The adopted measure to transfer the obligation to pay most of the social contributions from the employer to the employee (Art.I, item 42 amending art.138, and item 69 of the GEO 79/2017 amending art.156 of the Tax Code) aims exclusively at mitigating the impact of the Unitary Pay Law, the purpose being to increase the rate of the contributions paid by the employee for the gross salary” PNL claims.
Liberals also say that Romania has already been warned by the European Commission on a possible breach of the provisions of the Stability Pact, and before adopting the GEO 79/2017 amending the Tax Code, EC has found that the Government doesn’t want to take into account the Commission’s recommendations, namely to adopt measures to ensure that the nominal growth rate of primary net public expenditure will not exceed 3.3 percent in 2017.
“By adopting GEO 79/2017, the Romanian Government violates the international law rules on complying in good faith with the international treaties signed by Romania, it exposes Romania to the continuation of the sanctioning procedure by the European Commission as a result of the violation of the Significant Deviation Procedure. The Treaty on Stability, Coordination and Governance within the Economic and Monetary Union is today a binding international treaty for signatory EU countries, it has full effect in European law, and failure to comply with the Fiscal Pact will compromise Romania’s chances to join the Schengen Area or the adoption of the EURO unique currency, because Romania, by the adopted fiscal policies, does not prove the promotion of budgetary discipline, which is contrary to the European Union’s objectives on the sustainable economic growth, employment, competitiveness and social cohesion “, the Liberals explain.
PNL also shows that the measures adopted by the GEO violate certain principles of equal rights f the people in the fiscal matter.
“The transfer of the obligation to pay most of the social contributions from the employer to the employee, as well as the reduction of their total by 2 percent, up to 37.25% (…), this measure obviously discriminates any citizen who is an employee, because the majority weight of the social contributions has been unfairly and exclusively transferred to the social category of the employees. Employees DO NOT benefit from the reduction of the social contributions, but from increased fiscal burdens as a result of the transfer of the payment obligation to the employees, employees are NOT socially protected, they are exposed to additional tax obligations that are disproportionate in relation to the employers. GEO 79/2017 DEOS NOT provide legal guarantees, because state cannot oblige the employers to increase the gross salaries so that the employees will preserve at least the net income they had until the adoption of the GEO” according to PNL.
They say that in order not to violate the constitutional principles, fiscality must be proportional, reasonable, fair and non-discriminatory, and the Government has to adopt a fiscality level that complies with financial criteria, unbiased and rational fiscal calculations, not by the Government’s free will.
“In the case of the GEO 70/2017, the Government hasn’t found and proved the existence of any danger to a public interest that should be protected consequently by fiscal measures unexpectedly adopted by GEO 79/2017. On the contrary, by adopting GEO 79/2017 in the form that has been published in the Official Journal of Romania, serious violations have been caused to fundamental rights and freedoms of the people and of the public interests of the Romanian state within international and European commitments” Liberals explain.
PNL also says that the Government hasn’t justify the existence of some exceptional situations whose regulations couldn’t be postponed. Liberals claim that it’s not enough for the government to invoke the emergency of the regulation in the content of the GEO, but also its motivation.
“For all these reasons, we ask you, according to the art.13 let. l’) and taking into account the art.14 of the Law no.35 since March 13, 1997 on the organization and functioning of the Ombudsman institution, republished, to notify the Constitutional Court in order to find and rule on the unconstitutionality of the Government’s Emergency Ordinance no.79/2017 amending and supplementing the Law no.227/2015 on the Tax Code, published in the Official Journal, Part I, no.885, since November 10, 2017” Liberals conclude.
In his turn, Ombudsman Victor Ciorbea stated that he will carefully analyze the request filed by PNL, saying that the institution will receive other requests on the amendment of the Tax Code for sure.
“We will seriously analyze it, especially since we will receive other requests other requests in the coming days” Ciorbea pointed out.