Minority in the Constitutional Court: The tax is higher than the EU and the Balkans, the rule of law is violated

The opinion of the minority of judges of the Constitutional Court on the lawsuit of the Association of Producers of Alcoholic Beverages, which requested the repeal of the law on the unification of excise duty, is clarified.

In the position against the majority that decided to overturn the producers' request and left in force the legal changes for the doubling of the excise tax, the two judges first argue that the Constitutional Court does not respect the principle of the rule of law in two cases with the same typology of consequences, the violation of proportionality.

"Taking into account the similarity of the two cases, we appreciate that the specific case should have the same conclusion as the result reached for the Tax Law - that of accepting the request, since the treatment in this case also has to do with examining the proportionality of the excise tax for small producers, for whom it immediately doubled due to unification. In this view, two diametrically opposed solutions, given in constitutional cases examined at the same time by the Court and with the same typology of consequences, do not respect the principle of the rule of law, in the sense of respecting the rule of continuity of jurisprudence" , cited in the minority opinion.

From January 1, 2023, after a 15-year period of differentiated excise duty depending on the amount of production, with the entry into force of the new excise law, the excise duty is unified, doubling it for beer producers under 200,000 HL per year , from the value of 360 ALL/HL to 710 ALL/HL.

For the two judges of the Constitutional Court who make up the minority opinion, the doubling of the excise duty is opposed for several reasons.

First, according to the opinion of the minority, the level of the imposed excise duty has not been chosen in the measure used by the vast majority of EU and Balkan countries, but has preferred to be ranked among those countries with the highest excise duty.

Secondly, in terms of the categorization of the production quantity, the reduced fee is not applied in support of small beers according to the EC directive.

"Despite the fact that European directives do not present an obligation for states to apply reduced tariffs, this practice is known and applicable and aims to differentiate beer producers depending on their capacities", the minority opinion states, among other things.

The two judges also argue that the doubling of the excise duty does not justify the avoidance of fiscal evasion as long as the brewing and trading industry is monitored by a tax stamp tracking system.

So in the decision of July 16, the Constitutional Court appreciated that during the trial it was not proven that the legal changes have violated the essence of the freedom of economic activity or put it at risk to the extent that its existence is questioned. In this perspective, the unification of the excise duty does not constitute a disproportionate tool. At the end of the examination of the case, for the above reasons, the Court decided, by majority vote, to reject the request.

At this point, we emphasize that the rapid entry into force of laws imposing obligations and/or restrictions should be an exception, based and justified in specific objective circumstances. This means that when changes are made in the fiscal field, such as the Anticipation of new obligations: or existing obligations, the time period left available for their entry into force must be justified only on the basis of the premise of guaranteeing a significant interest public, such as the stability of public finances.

In this direction and in the context of the constitutional principle of the rule of law, the legislator, in the cases of laws pertaining to the fiscal system, is obliged to provide for a sufficient period of time for the entry into force of the law, during which the subjects will to be able to prepare for the implementation of the requirements arising from the new legal rules. This gives the guarantee to them not only to familiarize themselves in advance with the new legal requirements, but also to adjust their property interests and prospects of economic activity in accordance with the new legal requirements. Despite this, in the present case, the legislator chose to immediately double the value of the excise duty. Seen under this lens, another milder tool selected by the legislator would be to reduce the threshold of 200,000 HL to a lower amount, similar to European models, or even to change the tariff proportionally for producers with over 200 000 HL per year./ Monitor