The Constitutional Court of the Republic of Belarus comprising of the Presiding Officer - Chairman of the Constitutional Court G.A. Vasilevich, Deputy Chairman A.V. Maryskin, Judges T.S. Boiko, K.I. Kenik, V.V. Podgrusha, A.A. Sarkisova, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin has examined on the grounds of part one of Article 116, part four of Article 122 of the Constitution of the Republic of Belarus the appeal of organizations on the issue of lawfulness of setting by Vitebsk, Polotsk and Novopolotsk city Councils of deputies of the local due for the right to deal with gambling business (right to locate the gambling institution).

      Having analysed the relevant provisions of the Constitution of the Republic of Belarus, the Civil Code of the Republic of Belarus, Laws of the Republic of Belarus "On entrepreneur activities in the Republic of Belarus", "On taxes and dues collected into the budget of the Republic of Belarus", "On local government and self-government in the Republic of Belarus", "On budget of the Republic of Belarus for 2003", Decrees of the President of the Republic of Belarus of 1 December 1998 No. 21 "On measures on regulation of gambling business in the Republic of Belarus", of 14 July 2003 No. 17 "On licensing of certain types of activities" and other enforceable enactments, the Constitutional Court found the following.

     In accordance with sub-item 1.3 of point 1 of Decree of the President of the Republic of Belarus of 1 December 1998 No. 21 "On measures regulating gambling business in the Republic of Belarus" with further alterations and addenda (hereinafter Decree No. 21) gambling business - activities directed to profit-making by a gambling institution as gain, payment for organization, carrying out or participation in the games of luck, bet, organization of totalizator; gambling institution - a place (casino, totalizator, bookmaking office, halls with automatic gambling machines, other gambling places) where games of chance take place and (or) making gambling on games of luck, bet. Legal entities and individual entrepreneurs shall have the right to deal with gambling only on the grounds of special permission (licence) issued for them according to the legislation (sub-item 1.1 of point 1 of Decree No. 21).

     Point 2 of Decree No. 21 has set the gambling tax; specified objects of taxation (gambling tables, automatic gambling machines, cash-desks of totalizators, cash-desks of bookmaking offices). Rates of gambling tax have been approved by Resolution of the Council of Ministers of the Republic of Belarus of 10 December 1999 No. 1930 with further alterations and addenda and shall form per month: gambling table of casino up to 10 tables - 3,500 EURO (the city of Minsk), 3,000 EURO (oblast centers) and 2,500 EURO (other populated localities); casino with 10 tables and more - 3,500 and 3,000 EURO; gambling automatic machine - 90 and 80 EURO etc.

     Decree No. 21 has also specified that the payers of gambling tax as regards income earned from this activity, shall pay no profit tax, added-value tax (except for added-value tax collected while bringing goods into customs territory of the Republic of Belarus), purpose dues for forming local purpose budget funds of stabilization of economy of producers of agriculture products and food-stuffs, housing and investment funds, purpose due for financing the expenses related to maintenance of housing stock, deductions to the republican fund of support of producers of agriculture products, food-stuffs and agrarian science and the tax from the users of highways into road funds, the due for the services of casino, income tax (for individual entrepreneurs). The Constitutional Court emphasizes that local taxes and dues have not been put on the list of compulsory payments, which shall not be paid by the payers of the gambling tax.

     Sub-item 1.1 of point 1 of Article 10 of the Law "On budget of the Republic of Belarus for 2003" envisages setting by oblast, Minsk city Councils of deputies, Councils of deputies of based territorial level in the territory of the relevant administrative and territorial units of the dues from the user (due for parking in specially equipped places, due for the right to trade, due from the owners of dogs, due for the right to use of local symbolism, due for holding auctions, health-resort due, fishing and hunting dues, due for building in health-resort zone etc.).

     Decision of Vitebsk city Council of deputies of 18 December 2002 No. 120 "On budget of the city of Vitebsk for 2003" has set in the territory of the city of Vitebsk the due for the right to deal with gambling business at the rate of 30 base units annually and approved the Provision on the procedure of calculation and payment of the local due for the right to deal with gambling business (point 7).

     Decision of Polotsk city Council of deputies of 27 December 2002 No. 24-3 "On budget of the city for 2003" has set in the territory of the city the due for the right to deal with gambling business and approved the Provision on the procedure of calculation and payment of the local due for the right to deal with gambling business in the city of Vitebsk (point 4). The rate of the due has been fixed as 600 EURO in Belarusian roubles equivalent according to the price of the National Bank of the Republic of Belarus as of the first day of the month of payment (Section 2 of the Provision). As for the subjects of entrepreneur activities who are registered in the Inspection of the Ministry on taxes and dues of the city of Polotsk, there shall be applied the lowering coefficient to the rate of 0.5.

     Decision of Novopolotsk city Council of deputies of 27 December 2002 No. 114 "On budget of the city for 2003" has set the due for the right to locate the gambling institution (sub-item 9.4 of point 9) and approved the Provision on the procedure of calculation and payment of the local due for the right to locate the gambling institution (point 10). The rate of the due is 300 EURO annually according to the price of the National Bank of the Republic of Belarus as of the first day of the month of payment (Article 3 of the Provision).

     In the opinion of the Constitutional Court, Vitebsk, Polotsk and Novopolotsk city Councils of deputies had realized in the given decisions their exclusive powers on setting of local taxes and dues, as well as independent, under point 2 of Article 10 of the Law "On budget of the Republic of Belarus for 2003", specification of the base and the objects of taxation, concrete rates, payers, privileges, the procedure of calculation and terms of payment of local taxes and dues in accordance with the law in question and other legislative acts of the Republic Belarus.

     At the same time, the Constitutional Court notes that the rates of the local due for the right to deal with gambling business (the right to locate the gambling institution) shall differ considerably: from 30 base units (the city of Vitebsk) and up to 600 EURO (the city of Polotsk).

     In its Decision of 3 November 2003 "On constitutionality of Decision of Novopolotsk city Council of deputies of 27 December 2001 No. 56 "On approval of provisions on procedure of calculation and payment of local dues set for 2002" in part of the local due for the right to trade" the Constitutional Court has already specified its position that if the legislative acts of the Republic of Belarus set duties and dues for enjoying the special right, for the purposes of inadmissibility of making the rates of local dues from the user to be excessive, the right to set the specified due by the local Councils of deputies should be specified in details by the law-maker.

     Moreover, the Constitutional Court in its decision of 4 April 2001 "On taxation of the subjects of entrepreneur activities in the sphere of transport service of citizens" had emphasized the necessity of analysis of economic validity of the tax rates.

     Guiding by Article 7, part one of Article 116, part four of Article 122 of the Constitution, Articles 7, 36, 38, 40, 40¹ of the Law "On the Constitutional Court of the Republic of Belarus", the Constitutional Court

RULED:

1. To find that Decisions of Vitebsk, Polotsk and Novopolotsk city Councils of deputies on setting of the local due for the right to deal with gambling business (the right to locate a gambling institution) were adopted within the powers granted by Article 10 of the Law of the Republic of Belarus "On budget of the Republic of Belarus for 2003".

2. To emphasize that the National Assembly of the Republic of Belarus has been proposed in Decision of 3 November 2003 "On constitutionality of Decision of Novopolotsk city Council of deputies of 27 December 2001 No. 56 "On approval of provisions on procedure of calculation and payment of local dues set for 2002" in part of the local due for the right to trade" for the purposes of observance of the constitutional provision on the unified fiscal, tax, credit and currency policy which shall be pursued in the territory of the Republic of Belarus (part two of Article 132 of the Constitution of the Republic of Belarus) and for securing the protection of the rights and lawful interests of taxpayers while adopting the law on budget of the Republic of Belarus for 2004 to pay attention to the necessity of specification of exhaustive list of local taxes and dues, which local Councils of deputies may set in the relevant territory, as well as to determine the parameters of the most important elements of local dues from the user (payers, objects of taxation, limits of rates).

3. The present Decision shall come into legal force from the date of its adoption.

4. To publish the present Decision in accordance with the legislation.

Presiding Officer —

Chairman of the Constitutional Court

of the Republic of Belarus                                                                                               G.A. Vasilevich