Is the Covid-19 solidarity tax unconstitutional?

By means of Legislative Decree 568 of April 15, 2020, the National Government created the Covid-19 solidarity tax that will be levied on public servants, contractors, and pensioners of the State for their salaries, pension allowances or fees over ten million pesos per month. Its rate will be progressive and will range from 15% to 20% depending on the remuneration received and the public entities that make the payment will act as withholding agents.

The purpose of this article is to question whether, in the light of the Colombian legal system (and apart from any moral or political consideration in this respect), this tax is unconstitutional. For this purpose, the following syllogistic exercise is established:

The Political Constitution of Colombia (art. 215) establishes that, during states of exception, "the Government may not impair the social rights of workers (...)". This is expressly reiterated in Law 137 of 1994 (art. 50), which regulates states of exception in Colombia and is part of the block of constitutionality as established in Rulings C-578/1995 and C-135/1996 issued by the Constitutional Court (Uprimny, R. De Justicia. El bloque de constitucionalidad en Colombia (...)).

The conventions of the International Labor Organization (ILO) are not only part of the Colombian domestic legislation (Political Constitution art. 53 clause 4) but are also part of the block of constitutionality (Constitutional Court, Sentences T-568/1999 and C-567/2000) and therefore are of preferential application and cannot be ignored even in states of exception.

Article 1 of the ILO Convention on the Protection of Wages (1949) establishes that "remuneration or profit, whatever its denomination or method of calculation, provided that it can be evaluated in cash" is to be considered as such. Likewise, Article 6 states that "employers shall be prohibited from limiting in any way the worker's freedom to dispose of his wages".

The ILO has stated that, in times of pandemic, states must implement measures "aimed at stabilizing livelihoods and incomes" (See ILO standards and Covid-19). According to this organization, income from employment means "the amounts received by workers as a result of their participation in salaried or independent employment". This receipt is understood to be "in cash", i.e., in the form in which it can effectively serve to defray their living expenses.

The Covid-19 solidarity tax, by effectively reducing the income from employment and preventing the employee from having access to this salary component, undermines the social rights of the worker and may be declared unconstitutional.

Apart from the above syllogistic conclusion, it could also be stated that the tax under study violates horizontal equity.

This notion indicates that individuals "with equal tax capacity must be treated equitably in the sense that they bear an equal proportion of the burden of the tax system" (E. Díaz González, Labor tax and income distribution). Under this perspective, it could be said that the mere fact of being state employees, contractors, or pensioners, does not put the taxpayers of this tax to be treated unequally to the other taxpayers.