The unconstitutionality of Tax Reform

The purpose of this article is to study the arguments presented by Senator Araujo, in order to analyze the real possibilities that exist for the aforementioned norm to be declared unconstitutional by the Constitutional Court.

Senators Araujo and Iván Duque warned, from the moment the first debate on the General Budget of the Nation was presented, about the existence of the constitutional irregularities to be analyzed. 

As irregularities affecting the constitutionality of the mentioned reform, the Senators established that the Political Constitution foresees that the Government may present a budget with a percentage of the same without financing and that for such purpose, the same Constitution has a norm called Financing Law, which is designed so that in an agile and expeditious manner the National Government may, after presenting the General Budget, achieve -through the same- to cover the deficit that finances the same budget.  Such Financing Law, as well as being agile (it is approved in the Joint Economic Commissions of the House and Senate) also has limitations, which consist in that (1) only items up to the amount of the deficit may be approved (Colombia has a deficit of 12.5 trillion pesos) and that (2) it may only regulate events that have a direct incidence during the term of such annual budget. 

The Centro Democrático stated that the same tax reform, in its explanatory memorandum, stated that it was processed within the framework of a Financing Law.  Said party indicated that the difference between processing the tax reform through a Financing Law (regulated by Article 347 of the National Constitution -appropriations law procedure-) and processing it through a Financing Law (regulated by Article 347 of the National Constitution -appropriations law procedure-) is the same as the difference between processing it through an Appropriations Law (regulated by Article 347 of the National Constitution -appropriations law procedure-). ) to processing it through an Ordinary Law through which the Tax Statute would be modified (regulated by Article 154 of the National Constitution) is that the processing of the former is an expeditious process that is debated in the Third and Fourth Joint Commissions of the House and Senate (given that it is in the Fourth Commission where the General Budget of the Nation is approved and therefore such Commission must approve the Financing Law that is part of the same), and the second is processed in the Third Commission of the House, then it goes to the plenary of the House, then to the Third Commission of the Senate and then to the plenary of the Senate.

Thus, in the opinion of the Democratic Center, the legislative procedure given to the tax reform violates the rules of the National Constitution since the procedure required therein for the laws to reform the Tax Statute was not complied with. 

Said group argues that an amendment to the Tax Statute, which intends to raise $53 billion (being the current deficit of $12.5 trillion) and which creates taxes that are not included in the tax law, 5 trillion) and that creates taxes or modifies elements thereof permanently and not simply for the 2015 fiscal year (such as the CREE surtax that reaches 19% and leaves Colombia with a tax rate of 43% and the wealth tax on individuals that remains indefinite in time) clearly cannot be enshrined in the Financing Law whose validity, by law, is restricted to the year of the budget it intends to finance. 

Finally, the Democratic Center establishes that having given to the tax reform a legislative procedure different from the one that constitutionally corresponds, violates the democratic principles enshrined in the Political Constitution, since the procedure established for the Financing Law is an abbreviated and expeditious legislative procedure, which does not require as many debates as the procedure for a tax reform, reason for which it could have been approved "by hook or crook" and not with the proper debate and study required for a subject of such importance.