Reply to the article: "Inexecutory norm of contributions in independent workers.

Reply to the article: "Inexecutory rule on contributions of self-employed workers: victory or defeat?"

Grateful for the space and opportunity provided by our friends of the business magazine gerencie.com, through this letter we present our comments and reply to the column published on May 23, 2019, entitled: "Inexecutory rule of contributions in independent workers: Victory or defeat? The foregoing, since we understand, in our capacity as plaintiffs, that the decision adopted by the Constitutional Court of declaring Article 135 of Law 1735 of 2015 - National Development Plan 2014 - 2018 - unconstitutional, generates countless concerns, but the truth is that such decision, far from becoming adverse consequences or (more) legal uncertainty, opens the doors for great benefits and opportunities as explained below.

In the first place, it should be clarified that the norms contained in a National Development Plan (NDP) must regulate matters or issues that have a connection or link with the objectives or goals contained in the general part of the NDP, and must also be closely linked to the financing of the national budget. In addition, the provisions included in a NDP may not be intended to be permanent, since by their nature, budgetary laws are rules that are characterized by their temporary and ephemeral duration. Likewise, it should be made clear that "the Plan Law cannot be used to fill the gaps and inconsistencies presented by previous laws" or to "exercise the general legislative power recognized to the Congress of the Republic, without any relation to the objectives and goals of the planning function" (Constitutional Court, Judgments C-377 of 2008 and C-394 of 2012, among others).

In this context, the regulation of such important aspects as the Basic Contribution Income (IBC) of independent workers without a service contract, such as capital rentiers or self-employed workers, far from providing certainty or legal security, implies that such provisions, being included in a law with no vocation of permanence, may be repealed or modified every four years by the next National Development Plan. The foregoing, without requiring further discussion or observance of the legal and economic consequences that this would have for the persons who are classified in these groups of independent workers, thus violating the principle of "no taxation without representation" that gave rise to revolutions such as the American revolution of 1765, the effect of which was the independence of the United States in 1783.

Such insecurity is demonstrated since Article 135 of the National Development Plan 2014 - 2018, which was previously declared unconstitutional, was only in force for a little more than three years, and not because of the decision of the Constitutional Court, but because Law 1955 of 2019, by which the Development Plan 2018 - 2022 is issued, expressly repealed it, re-regulating the matter and eliminating the obligation of withholding contributions to be paid by the Contractors.

The repeal of Article 135 and the non-reproduction of the obligation to withhold contributions in the rule included in the new NDP, would imply, from a strictly legal point of view, the decay of the effects of Decree 1273 of 2018, since the latter regulated the expressly repealed rule. Such decay would call into question the continuation in force of the rules of such Decree that allowed independent workers to finally make their contributions on a monthly basis to the Integral Social Security System (SSSI), as well as it would eliminate the obligation of contractors to withhold contributions to their contractors, which was required in June 2019.

With the foregoing, it is clear that the uncertainty to which the regulation of the IBC applicable to self-employed workers without a contract for the provision of services is subject, does not arise from the declaration of unenforceability of Article 135 of Law 1753 of 2015, much less from the unenforceability that may eventually be declared with respect to the article that regulates this matter in Law 1955 of 2019, but is due to a structural problem created by the National Government that decided to fill such legal vacuum through a PND whose rules are temporary in nature. This situation turns out to be unfair compared to the regulation of the IBC of independent workers who have signed a service provision contract, which was regulated through an Organic Law whose nature is to last in time, this is Law 1122 of 2007, a rule that since that annuity has not undergone any modification.

It is for all of the above, that our objectives as plaintiffs of Article 135 of the National Development Plan 2014 - 2018, beyond the violation of the principle of unity of matter, were aimed at seeking that the IBC of those who do not have a service provision contract, be regulated through a law that not only lasts over time, but that also recognizes the differences that exist between the income received by a capital rentier (dividends, financial yields or leasing royalties) and the reality faced by self-employed workers who perform activities that may be highly informal.

A clear example of this is the transporters' guild, who incur in costs and expenses paid in cash, which many times, due to the informality of the sector, makes it impossible to obtain an invoice or equivalent support that can be asserted before a possible audit process initiated by the UGPP, being in the painful obligation of incurring in penalties for omission or inaccuracy, which would obviously cause any Colombian citizen an irremediable economic damage. The same occurs, for example, for those capital rentiers who receive dividends, not being able to deduct any associated cost or expense given the nature of passive income that characterizes this type of income.

Thus, the deferred unenforceability of the rule - far from being something negative - creates a range of opportunities for the Congress of the Republic to issue a solid, fair, equitable, progressive and lasting regulation regarding the IBC of workers who have not signed a service contract, and thus recognize the reality of the country and the harmful effects that the sanctions imposed by the UGPP are generating in the Colombian population.

In this way, we substantially differ with the approach of the column, according to which "with the disappearance of that rule (Article 135 of Law 1735/2015) things go back to the way they were before, where self-employed workers had to pay social security on 40% of net income without being able to impute any cost or expense"; This is an imprecise statement that does not study in depth the legal effects of the decision of the Constitutional Court, since the Court, even though to date there is no access to the text of the Judgment, defers the effects of the unenforceability in time, conditioning the loss of validity of this rule to the Congress of the Republic to fully regulate the matter.

The statement that "surely the lawyers who sued this regulation and will sue the other one did not consider this reality (sic) that instead of helping the independent worker will seriously harm him/her" is not accurate either; since it assumes that we do not know the reality faced by independent workers, wrongly suggesting that our interest is far from benefiting them, when it is precisely the opposite. The above is overcome if we take into account what has already been said, and the opportunity we seek to give to independent workers without a service contract, to have fair and equitable conditions that recognize the reality of the country, no longer being subject to the temporality of the National Development Plans.  Suffice it to say, for the moment, that Senator Angélica Lozano has already announced, in radionacional.co, that she will present a bill "to regulate these payments, as well as the use of the figure of the service provision contract by public and private entities".

In conclusion, the ruling handed down by the Constitutional Court, which declared Article 135 of the previous PND unconstitutional, creates the opportunity for the reality of capital rentiers and self-employed workers to be reflected in a law that fully regulates the matter. This implies overcoming conformism and seeking the improvement of Colombian legislation, reminding the National Government and the Congress of the Republic that constitutional provisions prevail over particular interests, and that the drama currently experienced by those who face penalties that far exceed their economic capacity must be solved.

It is therefore the time to unite as a guild (tax advisors, accountants and lawyers) to review which other rules are contrary to the Political Constitution of Colombia, in order to act actively and jointly to order their corresponding adjustment.