CAL suggests consulting the Constitutional Court on the repeal of the tax reform

The decision of the Legislative Administration Council (CAL) to consult the Constitutional Court (CC) to interpret whether the National Assembly can repeal an urgent economic law promulgated as a decree-law generates several readings in the legislature.

The CAL, in the session of January 28, postponed its decision to qualify two bills proposed by the Union for Hope (UNES) and the Pachakutik movement (PK), which propose to repeal the tax reform in force since January 2022 until the Constitutional Court rules.

Qualification of bills that propose to repeal taxes is postponed

The legislator of the Democratic Left (ID) and second vice president of the legislature, Yeseña Guamaní, moved to suspend the discussion of the point referring to the qualification of the tax reform project, until “this Council can count on a pronouncement from the Court Constitutional as the highest body of constitutional interpretation that establishes the scope of the rule contained in the final paragraph of article 140 of the Constitution, an essential element of judgment to be able to make a decision, and that at the moment is not available.

The resolution was approved with the votes of Assembly members Guadalupe Llori (Pachakutik), Virgilio Saquicela and Nataly Arias (BAN-CREO) and the proponent Yeseña Guamaní (ID).

The decision contemplates that the plenary session of the National Assembly must resolve the presentation of an interpretation action before the Constitutional Court on the power of the legislature to modify at any time an urgent law on economic matters published in the Official Registry as a decree-law by the president of the Republic. For the approval of a resolution, 70 votes are required, but before that it will depend on the president of the Assembly, Guadalupe Llori, who includes the issue on the agenda.

legislative positions

Assemblyman Pabel Muñoz of the UNES bench pointed out that article 140 of the Constitution is clear and does not need any additional interpretation by the Constitutional Court and that it is unfortunate that the legislator who raised the motion is unaware that the Court, when making the presentation on constitutionality regarding the green tax law, did not make any observations on how it was repealed by the National Assembly in 2019.

He also pointed out that the CAL, in its resolution, is unaware that there was a legal precedent regarding the power that the Assembly has to repeal an urgent law on economic matters when it has been published as a decree-law by the Executive, this in reference to the repeal of the green tax.

The Democratic Left, through legislator Wilma Andrade, on the other hand, defended the motion approved by CAL, and said that it is important to consult the Constitutional Court to clarify the application of article 140 of the Constitution, which must go hand in hand with Article 301 of the Magna Carta regarding the reservation of the Executive Law to modify or repeal economic laws.

He warned that this issue of the repeal has a political manipulation by the Correistas who intend to “wash their faces after they are co-responsible for the law being in force.” Now pretending to apply a repeal from the Assembly has a political-electoral intention, because with his vote in November he prevented the project that today they want to repeal from being filed.

He clarified that the Environmental Promotion Law or known as the green tax was not modified by an initiative of the National Assembly, but rather that the former president of the Republic, Lenín Moreno, on May 30, 2019, pressured by public opinion, had to send a Bill to repeal the environmental tax on vehicle pollution, because that power is exclusive to the Executive.

The projects presented propose to repeal all the reforms applied to 22 regulatory bodies, related to the modification of the ranges of the progressive rate of the income tax, the new deduction of personal expenses, the elimination of the inheritance tax for the children of the deceased or for the surviving spouse, temporary contributions to the wealth of individuals and companies, among other tax reforms that came into force in January 2022.

The UTL report determined that the two projects presented do not meet the formal requirements established in articles 134, 135, 136 and 301 of the Constitution. These are related to the exclusive competence that the President of the Republic has to present bills that create, modify or abolish taxes, increase public spending.

At the level of the Constitutional Court, there is more than one request for unconstitutionality of the organic law project for economic development and fiscal sustainability, after the COVID-19 pandemic. (I)