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The decision of the Supreme Court of Justice to suspend for 90 days the application of any rate or contribution created by the states or municipalities, “Unconstitutionally cancels the exercise of the Tax Power enjoyed by the states and municipalities,” says the Venezuelan Association of Tax Law (AVDT) in a statement.
The union organization also warns that the TSJ lacks competence to dictate legal norms in this matter and in any other by virtue of the principle of Separation of Powers in accordance with article 136 of the Constitution.
Here is the text of the AVDT statement:
The Constitution attributes to the national power the competence to dictate norms for the coordination and harmonization of the different tax powers in the States and Municipalities. These rules are aimed at streamlining the exercise of tax powers, undue interference between different territorial politicians, recognize the Republic as a single customs territory, protect and strengthen the national economy and avoid taxpayers’ superimposition.
The aforementioned ruling indicates that the coordination and harmonization legislation has not been enacted, when in the case of the Municipalities, The Organic Law of the Municipal Public Power contains norms of harmonizing character of the tax power of the Municipalities.
In any event, the supposed absence of legislation harmonizing tax powers cannot be remedied under any pretext with judicial measures, since the Supreme Court of Justice lacks powers to issue legal norms in this matter and in any other, by virtue of the Principle of Separation of Powers, in accordance with article 136 of the Constitution.
The Venezuelan Association of Tax Law has urged the National Assembly to issue regulations with the aim of rationalizing the taxation of States and Municipalities, it has censured state laws and municipal ordinances that undermine constitutional rights and guarantees, criticized fiscal voracity and has presented proposals to implement the constitutional mandate aimed at rationalizing the tax system (Among other proposals in VIII, X, XIII, XV, XVI and XVIII Tax Law Conference).
Without prejudice to the exposed, This Association denounces the unconstitutionality that derives from using the judgments of the Supreme Court of Justice as normative instruments, pseudo laws, what has been called “judicial activism” and which implies a clear user of the legislative competence of the National Assembly.
In this context, the ruling of the Constitutional Chamber under the guise of harmonizing the tax powers of the States and Municipalities, unconstitutionally nullifies the exercise of the Tax Power enjoyed by such entities, extending the effect of its ruling to matters beyond the appeal filed against the Ordinance for the Creation of the Tax Value Units in the Municipality of Chacao, object of challenge by the appellant, also distorting the content and scope of the precautionary power granted to that Chamber.
On the other hand, and under the same reasoning set forth, this Association questions the unconstitutional delegation in Organs of the Executive Power for the creation of norms and parameters of harmonization of the Tax Powers of the States and Municipalities whose attribution corresponds to the National Assembly.
We also note that the contested ruling is far from serving as an instrument for the restoration of constitutionality and legality in relation to the contested ordinance -In case there are merits to it- it has the potential to generate a state of disorder and legal insecurity, since it is unknown whether the suspension agreed to includes the taxes constitutionally attributed to the States and Municipalities, or it covers limitedly the rates or contributions in the terms expressed in the sentence device.
Finally, this Association vows that political, trade union, professional and academic actors, regarding this questioned ruling, may resume in the National Assembly the debate and discussion of harmonizing content standards. In this sense, lThe Venezuelan Tax Law Association makes the substantial material available to the National Assembly produced in the various conferences and scientific forums related to this matter, the statement said.
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