There is a difference between retroactivity and retroactivity of a law, and this would correspond to the immediate entry into force of the changes to reduce the payment of income tax brought about by the legal decree that the executive branch referred to the Constitutional Court.

That constitutional control body will be the one that will analyze and decide on the validity or invalidity of the regulation that foresees the tax reform. The hearing is scheduled for June 6, and among amicus curiae who come up with arguments that support the debate, he utters it.

The sports forecast company and SRI were the first to present ‘amicus curiae’ to the Constitutional Court with the tax reform decree

Article 300 of the Constitution establishes that “the tax regime will be governed by the principles of generality, progressivity, efficiency, administrative simplicity, non-retroactivity, fairness, transparency and sufficiency of collection. Priority will be direct and progressive taxes. Tax policy will promote redistribution and encourage employment, production of goods and services, and responsible environmental, social and economic behavior.”

The Tax Administration (SRI) mentions this non-retroactivity in its submission to the court. “This principle establishes that laws cannot have a retroactive effect, they cannot be applied to events that occurred before their validity. It is our understanding that the main motivation for including this principle in the Constitution was to provide legal certainty to Ecuadorians, so as not to put them in a more difficult situation regarding this issue. We could consider that this provision seeks to protect the taxpayer from abuse of the fiscal state, but not to limit the application of rules that are more beneficial to taxpayers”. It is added that the immediate entry into force of the tax regulations on personal income tax is justified because it implies a reduction in the tax burden of every taxpayer and the principle of convenience established by the Constitution.

Without certainty about the time that the Constitutional Court will need to decide on legal decrees, a quick response is expected

However, inadequate treatment of the principle of non-retroactivity in tax matters could create legal uncertainty in this and subsequent cases, Pablo Fernando Villegas Landázuri, lawyer and former national head of the Department of Tax Regulations of the National Legal Administration SRI. Therefore, it indicates that it is necessary to provide elements for the legal analysis of the principle of prohibition of retroactivity and similar terms:

According to his analysis, the first general provision of the Regulation on the organic law to strengthen the family economy refers to the case of retroactivity, since the proposed reform affects the fiscal year 2023, a situation that has not yet been consolidated. For this reason, he believes that “there are enough elements at the level of doctrine and international jurisprudence that allow a clear retrospective (not retroactive) content of the first general provision.”

Criteria for proceedings in the Constitutional Court

Constitutionalist André Benavides believes that if the Constitutional Court starts to check what is urgent in economic matters through decree laws, it would open the door to solve this type of unconstitutionality in an ordinary regime, that is, without crucifixion. required by law. “The classification ‘urgent’ is the private authority of the President of the Republic”, and highlights Articles 140 and 148 of the Constitution and Article 56 of the Organic Law on Legislative Function.

For José Chalco-Salgado, doctor of law, the Constitutional Court must rule quickly, because in an ordinary moment the Constitution gives the National Assembly thirty days to process an urgent economic law. “Be careful, the Constitutional Court needs more than the thirty days that the Assembly has in the regular period to resolve this. We are in an exceptional moment, a moment in which healthy criticism, promptness and opportunity are required from the Court”, he explains.