Decrease of the excise rates for certain means of transportation – unconstitutional

On 14 February 2014 the Constitutional Court delivered its judgment on the constitutionality of certain provisions of the Annex No. 2 of the Title IV of the Tax Code, as amended by Law No. 324 of 23 December 2013 on changing and amending certain legislative acts (Complaint No. 7a/2014).

Circumstances of the case

At the origin of the case lies the application submitted to the Constitutional Court on 10 February 2014 by the MPs, Messrs Mihai Ghimpu, Valeriu Munteanu and Gheorghe Brega.

Following the insertion in the Law No. 324 of 23 December 2013 of the Annex No. 2 in the Title IV of the amended Tax Code, there were increased the excise rates on the import of means of transportation, except for those challenged by the authors of the application, applicable to the means of transportation with cylinder capacity exceeding 3000 cm³ and 2500 cm³, as classified according to the price headings “870324” and “870333” on which the excise rates were decreased during the passing of the law in its final reading, from 3.50 EUR to 2.00 EUR per unit.

The authors of the application alleged, in particular, that the challenged provisions violate the procedure of working out the national public budget and are contrary to the Articles 6, 7, 8, 72, 74 and 131 of the Constitution.

The Constitutional Court ruled on the application in the following composition:

Mr Alexandru TĂNASE, President,

Mr Aurel BĂIEŞU,

Mr Igor DOLEA,

Mr Tudor PANŢÎRU,

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 passed only following an approval of the Government.

The Court held that, on 23 December 2013, the Parliament passed the challenged provisions with no 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 by 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 passed in such a manner are unconstitutional.

Judgment of the Court

Starting from the reasoning invoked above, the Constitutional Court:

-       declared admissible the application of the MPs, Messrs Mihai Ghimpu, Valeriu Munteanu and Gheorghe Brega on the constitutionality of some provisions on the amount of the excises for some means of transportation;

-       declared unconstitutional  the excise rate of “2,00 EUR” of the price headings “870324” and “870333” of the Annex No. 2 of the Title IV of the Tax Code No. 1163-XIII of 24 April 1997, as amended by Law No. 324 of 23 December 2013 on changing and amending certain legislative acts;

-       until the legal framework will be supplemented with provisions regarding the amount of the excises for means of transportation referred at the price headings “870324” and “870333” of the Annex No. 2 of the Title IV of the Tax Code No. 1163-XIII of 24 April 1997, are to be applied the provisions preceding the amendments adopted by the Law No. 324 of 23 December 2013 on changing and amending certain legislative acts.

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.