Constitutional Court declares that early tax collection is unconstitutional

The Constitutional Court held an extraordinary session and ruled that the anticipated collection of taxes, established by the Presidency of the Republic in Executive Decree 1109, is unconstitutional.

The Court announced that with this ruling this decree is unsupported.

In addition, it is provided that if any item has been collected, mechanisms must be provided for its return or those affected may use the amount paid as a tax credit in accordance with the provisions of current regulations; or credit the amount paid as a voluntary advance.

“Decree No. 1109, rather than constituting a measure directed to overcome the reasons considered constitutional by the favorable opinion issued by the Constitutional Court – that is, to face the health crisis caused by the COVID-19 pandemic – aims to collect a tax in advance as a reaction in view of the current economic crisis, a purpose that was expressly and emphatically disallowed by the opinion issued by this Organism ”, says the ruling.

In the same way, the Constitutional Court clarified that at no time was it justified that the anticipated collection of taxes was destined exclusively to cover the expenses to face the pandemic and even less that the collected is going to be used during the state of emergency to overcome the public calamity that justified it.

The ruling was approved with the support of 5 magistrates, since the remaining 4 indicated that they did not agree with the decision of the majority of the Plenary.

Source: Constitutional Court

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