9 October 2002 № D-148/2002
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 V.V. Podgrusha, A.A. Sarkisova, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin, having examined on the grounds of part one of Article 116, part four of Article 122 of the Constitution of the Republic of Belarus collective and individual complaints of citizens on the issues connected with calculation of real-estate tax.
The complaints contain opinions on inequality of citizens who are private householders and citizens who are owners of flats in tenement-houses; on inequality of citizens who have houses in the city of Minsk with paying the tax under ascending tax scale approved by point 23 of Decision of Minsk city Council of deputies of 11 January 2002 No. 219 "On budget of the city of Minsk 2002" and citizens who live in other cities and regions of the republic with paying the tax under 0,1 per cent of the rate of the cost of buildings; on overestimation of private houses and grounds.
Having analysed the relevant provisions of the Constitution of the Republic of Belarus, Laws "On real-estate tax", "On budget of the Republic of Belarus 2002", "On taxes and dues collected into the budget of the Republic of Belarus" and other enforceable legal acts, the Constitutional Court found the following.
1. Living accommodations in tenement-houses owned by natural persons shall be exempt from real-estate tax on the grounds of Article 4 of the Law "On real-estate tax" as a tax privilege. At the same time it is established that in instance of presence of two or more living accommodations immunity from taxation shall have only one living accommodation at the payer's option.
Under Articles 97, 98 of the Constitution of the Republic of Belarus introduction of national taxes and dues shall refer to the competence of the Parliament. It follows from the given constitutional norm that the Parliament shall have the right to solve in law the most important issues without which tax obligation and the procedure of its fulfilment may not be regarded to be determined (subject, object, tax rate etc.) as well as those issues which make no influence on the degree of definiteness of tax obligation. The latter, in particular, shall be tax privileges.
In the opinion of the Constitutional Court introduction by the Parliament of the Republic of Belarus within its competence of a tax privilege by way of exemption from real-estate tax of one of living accommodations in tenement-houses owned by a natural person shall not be at variance with the Constitution of the Republic of Belarus.
2. In accordance with part two of point 1 of Article 3 of the Law "On real-estate tax" annual rate of tax of the value of block flats, outbuildings, garages, owned by natural persons, buildings and constructions which belong to garage construction co-operatives, gardenership associations created for the accounts of personal payments, as well as buildings and constructions used by entrepreneurs without creation of a legal entity for carrying out their activities, shall be fixed at the rate of 0,1 per cent.
At the same time, point 4 of Article 44 of the Law "On budget of the Republic of Belarus 2002" stipulates that in 2002 local Council of deputies shall have the right to increase (reduce) the rates, to give certain citizens privileges, to fix or alter the terms of pay of real-estate tax.
The Constitutional Court deems, that since the yearly adopted laws on budget specify the resources of forming revenue part of budget and due to that - peculiarities of taxation in regular year, norms of the law on budget in that case shall be of priority.
The right of Minsk city Council of deputies to set in 2002 the rates of the tax in question which are different from that specified in the Law "On real-estate tax" has been realized in point 23 of its Decision of 11 January 2002 No. 219 "On budget of the city of Minsk 2002".
In respect to the opinion of applicants on undue sum of real-estate tax in the city of Minsk the Constitutional Court emphasizes that the use of progressive scale of the rate of the tax approved by Minsk city Council of deputies shall really increase to a considerable extent the sum of tax in comparison with the sum of the tax calculated with the use of 0,1 per cent rate established by the Law "On real-estate tax". Thus, if the tax from the object of taxation 31 m. r. worth (ca. 16,5 thous. US dollars) at the rate of 0,1 per cent is 31 thous. r., then the tax calculated at the rates approved by Minsk city Council of Deputies - 145 thous. r. and that is 4,7 times more.
In the opinion of the Constitutional Court, for securing the protection of the constitutional rights of citizens and their guarantees, for removal from inequality of real-estate tax-payers of different cities and regions of the republic, as well as for ensuring adoption by local Councils of deputies of optimal decisions in the sphere of setting of rates of the tax in question there should be specified in the law on budget of the Republic of Belarus for a regular year maximum limits within which local Councils of deputies may increase the rates of real-estate tax.
The Constitutional Court also emphasizes that the tax legislation stipulates a number of tax privileges for the citizens who are in need of social protection of the state. Under Article 4 of the Law "On real-estate tax" the following shall be subject to exemption from taxation: buildings and constructions which belong to age pensioners, invalids of I and II groups, as well as to other disabled citizens in case of absence of able-bodies persons who live jointly or who are on the list of living jointly in accordance with the information of housekeeping records or house-registers, and who have no sources of income liable to income taxation by taxation bodies; buildings and constructions which belong to servicemen of additional service (voluntary undertaken after completion of statutory period), for the participants of Great Patriotic war and for the persons who shall have the right to privilege taxation under the Law "On veterans"; buildings and constructions situated in the countryside and owned by the citizens who reside constantly in rural area.
Moreover, according to part three of Article 4 of the Law "On taxes and dues collected into the budget of the Republic of Belarus" local Councils of deputies or by their order local executive and administrative bodies shall have the right to grant natural persons of the Republic of Belarus, by way of procedure specified in the acts of the President of the Republic of Belarus, tax and due privileges which are subject to be paid in full into national budgets.
3. According to point 1 of Article 5 of the Law "On real-estate tax" for natural persons the tax shall be fixed on the grounds of valuation of buildings and the procedure of the valuation shall be determined by the Government. The currently effective procedure has been established by Resolution of the Council of Ministers of the Republic of Belarus of 27 February 1998 No. 309 "On procedure of valuation (revaluation) of buildings and constructions which belong to natural persons" with further alterations and addenda (hereinafter also referred to as Resolution No. 309).
For the purposes of calculation of the tax Resolution No. 309 has envisaged three approaches to determination of the valuation of buildings and constructions the application of which shall depend, first of all, on their obligatory insurance.
Thus, as regards buildings and constructions which are subject to obligatory insurance (sub-item 1.1 of point 1 of Resolution No. 309) as a basis shall be assumed insurance valuation which is carrying out by Belarusian republican unitary insurance enterprise "Belgosstrakch" or by legal and natural persons which and who concluded contracts with the enterprise in question.
Values of buildings and constructions which are subject to no obligatory insurance (sub-item 1.2 of point 1 of Resolution No. 309) shall be determined by enterprises of registration and of technical inventory or under their contracts with experts and organizations which and who are authorized to carry out evaluation and expert examination.
In case of impossibility to make evaluation by the methods specified in sub-items 1.1 and 1.2 of point 1 of Resolution No. 309, the evaluation shall be carried out by local executive and administrative bodies. The cost of similar buildings and constructions evaluated under the procedure specified in the given sub-items shall be taken as an object of taxation.
The Constitutional Court emphasizes that evaluation process shall be regulated by more than 50 enforceable enactments and legal acts which are not normative. Moreover, applicable are coefficients for re-evaluation of housing stock and of basic funds of enterprises and organizations, coefficients of a type of a populated area fixed by the Ministry of Architecture and Building, as well as coefficients of quality of surroundings which shall be fixed by local executive and administrative bodies. Coefficients of quality of surroundings (shall be fixed taking into account the distance of the object under evaluation away from the centre of a populated area, transport service with its other zones, security by the object of social infrastructure, due to ecological and other factors affecting the cost of objects which are subject to evaluation) under existing situation of real estate market of the relevant populated area shall be elaborated and re-approved not frequently than once a five-year period of time.
The Constitutional Court shall consider such a situation, where a great number of legal acts are applying for making evaluation of a building (construction), where evaluation is carrying out by various structures, to be unjustified and complicated and do not promote the achievement of the enshrined in Article 21 of the Constitution of the Republic of Belarus goal of the State - securing the right and liberties of citizens. In the opinion of the Constitutional Court, there is a need of additional study and substantiation by competent bodies of state power of specification for the natural persons of the real-estate tax based on the evaluation of buildings and constructions where the basis shall be insurance valuation.
In its Decision of 11 June 2001 "On pay of succession duty" the Constitutional Court had indicated that the applications of citizens against ill-founded overestimation of buildings and constructions while their assessment by bureau of technical inventory shall signify about the necessity to reconsider the existing technique for assessment of buildings and constructions in order to find an optimal balance of interests between the state and citizens who received inheritance. The Constitutional Court had proposed the authorized bodies to make analysis of the technique of evaluation of buildings and constructions owned by natural persons in order to find the possibility of its revision for more full protection of constitutional rights and lawful interests of citizens who inherited property. The Council of Ministers of the Republic of Belarus had been forwarded to the letter of 14 September 2001 "On obligatory insurance of constructions owned by citizens" with the reference to the abovementioned Decision of the Constitutional Court and with the specification that the given proposal shall also refer in full to the case of fixation of insurance value (insurance valuation) of constructions which are subject to obligatory insurance.
The applications and complaints under examination shall signifies that the proposals made by the Constitutional Court are still actual.
The Constitutional Court pays attention to the fact that the Law of the Republic of Belarus of 22 July 2002 "On State registration of real property, right to real property and transactions with real property" (will take legal effect since 8 February 2003) shall envisage creation of the system of state organizations in the field of state registration where under Article 11 there are a specially authorized body of state power of the Republic of Belarus in the field of state registration subordinated to Government; republican organization on state registration; territorial organizations on state registration. The competence of territorial organizations on state registration (republican unitary enterprises where registering clerks shall perform their functions in accordance with the given Law) shall be inventory making of real property and verification of its characteristics in cases and under the procedure specified by specially authorized body of state power.
In the opinion of the Constitutional Court, it would be advisable for the competent state bodies to study the issue on referring of evaluation of the cost of buildings to the concomitant with the state registration of real property types of activities and to give those organizations the relevant powers.
Guided by 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 emphasize that under Articles 97, 98 of the Constitution of the Republic of Belarus setting of republican taxes and dues shall be referred to the competence of the Parliament. The Parliament shall have the right to solve in the law not only such significant issues on taxation as subject, object, rate of tax and other without which tax obligation and the procedure of its fulfilment may not considered to be determined, but also other issues to which, in particular, shall be referred the specified in Article 4 of the Law "On real property tax" tax privilege as exemption from taxation of one of living accommodations in tenement-houses owned by natural persons.
2. To find point 23 of Decision of Minsk city Council of deputies of 11 January 2002 No. 219 "On budget of the city of Minsk 2002" to be in conformity with the Constitution of the Republic of Belarus and with the Law of the Republic of Belarus "On budget of the Republic of Belarus 2002".
To propose the Parliament of the Republic of Belarus, in order to secure more fully the protection of constitutional rights of citizens and their guarantees, to remove from inequality of payers of real-estate tax in different cities and regions of the republic and ensuring the adoption by local Councils of deputies of optimal decisions in the field of setting of the rates of the specified tax in question, to specify in the Law on budget of the Republic of Belarus for regular year the maximum limits within which local Councils of deputies may give rise the rates of the real-estate tax.
3. To propose the Council of Ministers of the Republic of Belarus:
to analyze the technique of evaluation of the owned by natural persons buildings (constructions) with a view to find the possibility of its revision for more full protection of the constitutional rights and lawful interests of citizens;
to study the issue on referring the activities on evaluation of buildings (constructions) owned by natural persons to the concomitant with the state registration of real property types of activities;
to systematize enforceable legal acts on the grounds of which there shall be carried out evaluation of buildings (constructions) owned by natural persons.
4. The present Decision shall come into legal force from the date of its adoption.
5. To publish the present Decision in accordance with the legislation.
Presiding Officer —
Chairman of the
of the