Kyiv Post Legal Quarterly - - News -

On Au­gust 3, 2017, the Law of Ukraine “On Con­sti­tu­tional Court of Ukraine” as of July 13, 2017 en­tered into force. Gen­er­ally, an adop­tion of such a Law is the re­sult of the amend­ments to the Con­sti­tu­tion of Ukraine as of June 02, 2016, which are the core of the cur­rent ju­di­cial re­form in Ukraine.

One of the main nov­els, set out in the men­tioned Law (as well as in the amend­ments to the Con­sti­tu­tion of Ukraine), is the in­sti­tute of con­sti­tu­tional com­plaint. Such in­sti­tute grants the peo­ple with the real op­por­tu­nity to can­cel the law, which does not cor­re­spond to the Con­sti­tu­tion of Ukraine by means of sub­mis­sion of the re­spec­tive com­plaint to the Con­sti­tu­tional Court of Ukraine.

In view of the qual­ity of cur­rent tax leg­is­la­tion, we be­lieve that the in­sti­tute of con­sti­tu­tional com­plaint could pro­vide pos­i­tive in­flu­ence upon Ukrainian tax­a­tion sys­tem and, as a re­sult, upon the whole in­vest­ment at­trac­tive­ness.

It is worth men­tion­ing that by this time, ac­cess to the Con­sti­tu­tional Court of Ukraine in or­der to rec­og­nize the law as un­con­sti­tu­tional, have been pro­vided to the short list of the state au­thor­i­ties. As a re­sult, or­di­nary cit­i­zens have been can­celled from the process of the ju­di­cial “clean­ing” of the de­fec­tive laws.

In view of that, on prac­tice, the Con­sti­tu­tional Court of Ukraine was not very ac­tive in the sphere of tax leg­is­la­tion. For ex­am­ple, pro­vi­sions of the Tax Code of Ukraine have been re­viewed by the Con­sti­tu­tional Court of Ukraine only twice since its adop­tion in 2011. If to com­pare re­cent sit­u­a­tion in Ukraine in this sphere, it is worth men­tion­ing that, for ex­am­ple, even the Rus­sian Fed­er­a­tion tax leg­is­la­tion has been the sub­ject of di­rect re­view by their Con­sti­tu­tional Court dozens of times since 2011 (in­clud­ing, via the mech­a­nism of con­sti­tu­tional com­plaint).

At the same time, there are def­i­nitely many more ques­tions with re­spect to the con­sti­tu­tion­al­ity of the Ukrainian tax rules. For ex­am­ple, pro­vi­sions re­lated to the lo­cal “ve­hi­cle tax” could be re­viewed by the Con­sti­tu­tional Court on their cor­re­spon­dence with Con­sti­tu­tion. Ac­cord­ing to the Tax Code of Ukraine, “ve­hi­cle tax” is de­fined as a lo­cal tax, which, ac­cord­ing to ar­ti­cle 143 of the Con­sti­tu­tion of Ukraine, should be es­tab­lished by the lo­cal coun­cils. How­ever, on prac­tice, such tax (all of its el­e­ments: tax rate, ob­ject of tax­a­tion, etc.) is fully es­tab­lished di­rectly in the Tax Code by the Ukrainian par­lia­ment. And the tax­pay­ers are, tech­ni­cally, obliged to pay it even if there is no spe­cial de­ci­sion of the re­spec­tive lo­cal coun­cil.

If to com­ment on the text of the men­tioned Law, then we should note that there are some tech­ni­cal ques­tions re­gard­ing its in­ter­pre­ta­tion. For ex­am­ple, the pro­ce­dure of ac­cess to the Con­sti­tu­tional Court, as it is set out in the new law, in some way is sim­i­lar to the pro­ce­dure of ac­cess to the Euro­pean Court of Hu­man Rights ( ECHR) – both courts may con­sider the re­spec­tive case only if all do­mes­tic reme­dies are ex­hausted by the ap­pli­cant.

In this re­gard, there is a ques­tion whether the Con­sti­tu­tional Court will use the ad­mis­si­bil­ity ap­proaches, used by ECHR. For in­stance, cri­te­ria of the ex­haus­tion of do­mes­tic reme­dies are in­ter­preted by the ECHR in a rather wide man­ner, but not only as for­mal obli­ga­tion to get the fi­nal de­ci­sion of the na­tional court. Ac­cord­ing to ECHR, such ex­haus­tion means also the obli­ga­tion of the ap­pli­cant to raise the dis­putable ques­tion be­fore the do­mes­tic courts and the obli­ga­tion to pro­vide them with the re­spec­tive ar­gu­ments.

From per­spec­tive of con­sti­tu­tional com­plaint in Ukraine, men­tioned ECHR’S ap­proach could mean that the ap­pli­cants will get the ac­cess to the Con­sti­tu­tional Court of Ukraine only if they raise the ques­tion of the un­con­sti­tu­tion­al­ity of the law which is still on the level of courts of gen­eral ju­ris­dic­tion.

How­ever, notwith­stand­ing some tech­ni­cal is­sues re­lated to the new Law, we be­lieve that, at this stage, the main task of the le­gal com­mu­nity, as well as of the Ukrainian cit­i­zens, is to show for the Ukrainian au­thor­i­ties that there is real de­mand for changes in the leg­isla­tive sphere. To show that Con­sti­tu­tion of Ukraine with its prin­ci­ples is not just a dec­la­ra­tion, but the ba­sic law, which ev­ery­one should com­ply with. And, re­spec­tively, to raise a ques­tion of con­sti­tu­tion­al­ity of those law, which seems to be de­fec­tive.

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