On reviewing for compliance with the Constitution of the Republic of Kazakhstan subitems 1) of paragraph 1 and paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan dated December 25, 2017 "On Taxes and other mandatory payments to the Budget" (Tax Code)
Regulatory Resolution of the Constitutional Court of the Republic of Kazakhstan dated February 22, 2023 No. 3.
The Constitutional Court of the Republic of Kazakhstan, composed of the Chairman, Deputy Chairman B.M. Nurmukhanov, judges A.K. Eskendirov, K.T. Zhakipbaev, A.E. Zhatkanbayeva, A.K. Kydyrbayeva, E.A.Ongarbaev, R.A. Podoprigory, E.J. Sarsembaev and S.F. Udartsev, with the participation of representatives:
the subject of the appeal, Dosmagambetov E.N., is lawyer Zholbolov N.K.,
Senate of the Parliament of the Republic of Kazakhstan – Deputy of the Senate of the Parliament of the Republic of Kazakhstan Orynbekov B.S.,
Government of the Republic of Kazakhstan – Vice Minister of Finance of the Republic of Kazakhstan E.E. Birzhanova,
Ministry of National Economy of the Republic of Kazakhstan – Vice Minister Amrin A.K.,
Ministry of Justice of the Republic of Kazakhstan – Vice Minister Zhakselekova B.Sh.,
The Prosecutor General's Office of the Republic of Kazakhstan – Advisor to the Prosecutor General Adamova T.B.,
Commissioner for Human Rights in the Republic of Kazakhstan – Deputy Head of the National Center for Human Rights Umarov A.S.,
Scientific Research Institute of Private Law of the Caspian University – Senior Researcher E.B. Osipov.,
Chamber of Tax Consultants of the Republic of Kazakhstan – Executive Director A.G. Khorunzhego
In an open meeting, I considered the appeal of citizen Dosmagambetov Yerzhan Nurzhanovich on checking compliance with the Constitution of the Republic of Kazakhstan of subitems 1) of paragraph 1 and paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan dated December 25, 2017 "On taxes and other mandatory payments to the budget" (Tax Code).
Having heard the report of the speaker, Judge of the Constitutional Court of the Republic of Kazakhstan A.K.Kydyrbayeva, having studied the materials of the constitutional proceedings, having analyzed the international experience and legislation of certain foreign countries, the Constitutional Court of the Republic of Kazakhstan
installed:
The Constitutional Court of the Republic of Kazakhstan has received an appeal from Dosmagambetov E.N. to review subitems 1) of paragraph 1 and paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (the Tax Code) (hereinafter referred to as the Tax Code) for compliance with the Constitution of the Republic of Kazakhstan.
By the decision of the Atyrau City Court of February 28, 2018, which was left unchanged by the decision of the Atyrau Regional Court of May 15, 2018, the amount of damage of 129,639,381 tenge and the state duty of 3,889,182 tenge were recovered from Dosmagambetov E.N. to the state income.
The subject of the appeal indicates that the collection of a state fee from him by the court of first instance in the amount of 3,889,182 tenge imposes on him the obligation to pay a state fee in the amount of 50% of this amount, which amounts to 1,944,590 tenge, upon filing a petition in cassation. His difficult financial situation does not allow him to pay such sums. He believes that the lack of funds deprives him of the right to judicial protection, poor citizens should be able to exercise their constitutional rights in the courts of the Republic.
According to Dosmagambetov E.N., the establishment of interest rates of the state fee for filing property claims and petitions for the review of judicial acts in cassation, combined with the absence of norms defining a reasonable upper limit of the state fee or providing for exemption from its payment, deferral, installment payment, actually restrict access to justice..
Dosmagambetov E.N. requests that the contested provisions of the Tax Code be recognized as inconsistent with the Constitution of the Republic of Kazakhstan.
When considering the compliance of subitems 1) of paragraph 1 and paragraph 2 of Article 610 of the Tax Code with the Constitution of the Republic of Kazakhstan, the Constitutional Court proceeds from the following.
In accordance with article 1 of the Constitution, the Republic of Kazakhstan asserts itself to be a democratic, secular, legal and social state, the highest values of which are man, his life, rights and freedoms.
This means that the state not only proclaims the rights and freedoms of man and citizen, but also guarantees their provision, creating all the necessary conditions.
The main guarantee for the protection of the rights and legitimate interests of citizens is the right to judicial protection, enshrined in paragraph 2 of article 13 of the Constitution. This right is absolute and inalienable and is not subject to restriction in any cases (paragraph 3 of Article 39 of the Basic Law).
By virtue of article 14 of the Constitution, everyone is equal before the law and the courts. No one may be discriminated against in any way on the grounds of origin, social, official or property status, gender, race, nationality, language, attitude to religion, beliefs, place of residence or any other circumstances.
These provisions correspond to the provisions of generally recognized international acts.
Article 7 of the Universal Declaration of Human Rights, adopted by Resolution 217 A (III) of the United Nations General Assembly on December 10, 1948, states that "all human beings are equal before the law and have the right, without any distinction, to equal protection of the law. All people have the right to equal protection from any discrimination that violates this Declaration and from any incitement to such discrimination."
The International Covenant on Civil and Political Rights, adopted by Resolution 2200A (XXI) of the United Nations General Assembly on December 16, 1966 and ratified by the Law of the Republic of Kazakhstan on November 28, 2005, also contains norms aimed at establishing guarantees by States of the right of every person to judicial protection, to a fair and public hearing of his case by a competent, an independent and impartial court established on the basis of the law, and the equality of everyone before the court. In addition, it is fixed: "All people are equal before the law and have the right, without any discrimination, to equal protection of the law. In this regard, any kind of discrimination should be prohibited by law, and the law should guarantee all persons equal and effective protection against discrimination based on any ground, such as race, skin color, gender, language, religion, political or other beliefs, national or social origin, property status, birth or other circumstances" (paragraph 3 of article 2, paragraph 1 of article 14 and article 26).
The content of the norms set forth in articles 13 and 14 of the Constitution has repeatedly been the subject of official interpretation. Thus, the Constitutional Council explained that the constitutional principle "everyone has the right to judicial protection of their rights and freedoms" means the right of any person and citizen to apply to the court for protection and restoration of violated rights and freedoms. This right is exercised on the basis and in accordance with the procedure established by law. Equality of all before the law and the courts means equality of individual rights and duties, equal protection of these rights by the State, and equal responsibility of the individual before the law (Normative Resolutions No. 7/2 of March 29, 1999, No. 9 of June 26, 2003, and others).
These principles have been developed and implemented in the Constitutional Law of the Republic of Kazakhstan "On the Judicial System and the Status of Judges of the Republic of Kazakhstan", in particular, paragraph 2 of Article 1 provides that:
– everyone is guaranteed judicial protection from any unlawful decisions and actions of state bodies, organizations, officials and other persons that infringe on or restrict the rights, freedoms and legitimate interests provided for by the Constitution and laws of the Republic.;
– no one can be deprived of the right to have his case examined in compliance with all the requirements of the law and justice by a competent, independent and impartial court.
An important element of the right to judicial protection is access to justice, a fundamental principle of the rule of law, which guarantees a person a real opportunity to go to court without any unreasonable obstacles.
Thus, the Constitution determines the main content and orientation of the laws adopted and in force to ensure mechanisms and guarantees for the exercise, along with other rights and freedoms, of everyone's right to judicial protection, to equality of all before the law and the court, and the inadmissibility of discrimination in any circumstances, including property. Accordingly, mandatory payments established in the sphere of activity of courts should not serve as a means of discriminating against citizens depending on their property status, infringe on the noted constitutional rights, hinder their implementation and restrict access to justice.
The constitutional obligation and duty to pay taxes, fees and other mandatory payments are universal and are enshrined in article 35 of the Constitution.
State duty is a payment to the budget levied for the commission of legally significant actions, including when applying to the court (paragraph 1 of Article 607 of the Tax Code).
Legislative regulation of the issues of determining the amount and procedure for paying state fees in the exercise of everyone's right to judicial protection is within the competence of Parliament, which is authorized to issue laws that regulate the most important public relations, establish fundamental principles and norms concerning the legal personality of individuals and legal entities, civil rights and freedoms, obligations and responsibilities of individuals and legal entities, taxation, setting fees and other mandatory payments, issues of the judicial system and judicial proceedings (subitem 2) of paragraph 1 of Article 54, subitems 1), 4) and 6) of paragraph 3 of Article 61 of the Constitution).
The state fee in courts is a mandatory payment to the budget, but it is not a payment for the work performed, services provided, property provided and is not designed to match the cost of legally significant actions.
When setting state duty rates as a percentage, the value of property benefits and rights claimed by the payer with the help of the state from third parties is usually taken as the basis for its calculation. At the same time, the value of the claimed does not characterize the property status of the payer himself, his actual ability to pay the state duty.
In the legislation of some States where the state duty rates are expressed as a percentage of the calculation base, they are usually limited to the upper limit. This approach allows everyone to exercise the right to judicial protection, since the amount of the state fee must be certain and reasonable, without burdening it in such a way that its payment violates the principle of accessibility of justice.
The Constitutional Court believes that when setting the amount of the state fee, a balance must be maintained between granting the right to seek judicial protection and ensuring the effectiveness of the courts, preventing the filing of knowingly unfounded claims and various abuses of the right.
The contested provisions of the Tax Code establish the rates of state duty when applying to the court for claims subject to property valuation.:
for individuals in the amount of 1% of the claim amount,
for legal entities – 3 %,
when filing petitions for the review of judicial acts in cassation – 50% of the corresponding rate of the state fee established at the time of filing the claim.
The study of the legal nature of the state duty in the courts and its purpose allows us to conclude that the establishment of these rates of state duty as a percentage is consistent with the provisions of the Constitution.
At the same time, the provisions of subitems 1) of paragraph 1 and paragraph 2 of Article 610 of the Tax Code, in conjunction with other norms, do not fully contain mechanisms to overcome obstacles to the payment of this payment by citizens in a difficult financial situation.
The fiscal objective of the state's tax policy should be achieved only on the basis of a balance between the economic interests of the State and the taxpayer (Article 11 of the Tax Code). When setting State duty rates, the legislator must find a reasonable balance between accessibility and effectiveness of justice. Violation of it may lead to restriction of citizens' rights, since the state fee is paid in cases considered by the courts before filing a corresponding claim or petition. In case of failure to provide evidence of payment of the state fee, the claim or petition is returned without consideration. A high amount of the claim may lead to the need to pay a state fee in amounts exceeding the material capabilities of a person, which will inevitably limit his constitutional right to appeal to the court.
In the opinion of the Constitutional Court, the establishment of interest rates of state duty in courts on property claims without legislative limitation of its amount within the limits available to payers deprives a citizen in a difficult financial situation of the opportunity to pay it and puts him in an unequal position in exercising the right to appeal to the court compared with other persons who have such an opportunity.. Accordingly, this approach creates conditions for limiting access to justice.
Article 616 of the Tax Code lists a specific list of grounds for exemption from payment of state duty in courts based on the category of the claim or the subject of the legal relationship (veterans of the Great Patriotic War, persons with disabilities, candace and others). However, they do not take into account the property status of all categories of citizens who pay it.
In addition, the current legislation does not provide for a deferral or installment payment. The only exception is the one case of deferral from payment of state duty on consumer protection claims filed by a citizen (part three of Article 106 of the Civil Procedure Code of the Republic of Kazakhstan dated October 31, 2015).
Until January 1, 2005, part two of Articles 104 and article 105 of the Civil Procedure Code of the Republic of Kazakhstan dated July 13, 1999 provided for the right of the court, based on the property status of the party, to exempt one or both parties from paying the state fee, to delay or installment its payment. Thus, the legislator gave the court sufficient discretion in each specific case to resolve the issue of payment of the state fee as a condition of access to justice.
These provisions of the procedural legislation were excluded by the Law of the Republic of Kazakhstan dated December 13, 2004 "On Amendments and Additions to certain Legislative Acts of the Republic of Kazakhstan on taxation". Thus, the legislator deprived the courts of the appropriate discretionary powers granted solely for the purpose of ensuring unhindered access of citizens to justice, while failing to provide mechanisms for the implementation of the constitutional right to judicial protection by persons in difficult financial situations.
The right to a fair trial, enshrined in the Constitution, must be properly ensured. Exemption in whole or in part from payment of the state fee, postponement or installment of its payment and other measures are among the legal instruments for exercising the constitutional right to judicial protection when applying to court is hampered by the property status of a person.
The amount of the state fee should be reasonable, reasonable, proportionate, and not obstruct a citizen's appeal to the court, or a legal mechanism should be provided for overcoming the barrier to the realization of the constitutional right to access justice.
Legislation in general, and the Tax Code in particular, does not contain such tools, so the legislator should fill in the gap in legal regulation.
Paragraph 2 of Article 610 of the Tax Code establishes the general principle of levying a state fee when filing petitions for the review of judicial acts in cassation – in the amount of 50 percent of the corresponding state fee rate established in paragraph 1 of this article. At the same time, the norm in question does not contain provisions that make it possible to unambiguously determine the subject of payment of this payment, on which its amount depends. The phrase used in it "when filing an administrative claim, statement of claim (application) for such disputes" in practice led to the refusal to accept the citizen's petition by the Supreme Court.
It follows from the materials of the appeal that an individual who is a defendant in the claim of a legal entity, when submitting a petition for review of judicial acts in cassation, the supreme judicial authority requires payment of a state fee in the amount of 50 percent of the state fee rate established in paragraph 1 of Article 610 of the Tax Code for legal entities.
This understanding and application of paragraph 2 of Article 610 of the Tax Code is inconsistent with the conceptual approaches of the legislator to determining the amount of state duty depending on the subject of its payment – individuals or legal entities.
It is the balance of the economic interests of the state and taxpayers that underlies the determination of lower state fees for individuals when exercising their right to judicial protection.
The Constitutional Court considers that when interpreting the provision of paragraph 2 of Article 610 of the Tax Code, "the state duty is levied in the amount of 50 percent of the corresponding state duty rate established in paragraph 1 of this Article when filing an administrative claim, statement of claim (application) for such disputes" should be based on the subject applying for judicial review in the cassation procedure.
Based on the conceptual differences in the approaches of the legislator to the collection of state fees depending on the subject of its payment, when applying paragraph 2 of Article 610 of the Tax Code, in cases where a citizen applies for a review of judicial acts in cassation, regardless of his procedural status (plaintiff or defendant), the state fee should be charged in the amount of 50 percent of the corresponding amount. the state duty rate established in paragraph 1 of this article for individuals.
A different understanding of the provisions of paragraph 2 of Article 610 of the Tax Code would reduce the effectiveness of the measures taken by the State to ensure that individuals can exercise their constitutional right to judicial protection of their rights and freedoms, which is unacceptable. Accordingly, paragraph 2 of Article 610 of the Tax Code regarding the words "when filing an administrative claim, statement of claim (application) for such disputes" does not correspond to paragraph 2 of Article 13 and Article 14 of the Constitution.
In a number of normative resolutions, the Constitutional Council pointed out that the law must meet the requirements of legal accuracy and predictability of consequences, that is, its norms must be formulated with a sufficient degree of clarity and based on understandable criteria that exclude the possibility of arbitrary interpretation of the provisions of the law. The principle of the rule of law implies the requirement of formal certainty, clarity and consistency of legal regulation, mutual consistency of subject-related norms of various branches (normative resolutions No. 2 of February 27, 2008, No. 2 of February 11, 2009, No. 5 of December 7, 2011, and others).
Based on the above, guided by paragraph 3 of Article 72 and paragraph 3 of Article 74 of the Constitution of the Republic of Kazakhstan, subparagraph 3) paragraph 4 of article 23, articles 55-58, 62, paragraph 4 of article 64 and subparagraph 2) Paragraph 1 of Article 65 of the Constitutional Law of the Republic of Kazakhstan dated November 5, 2022 "On the Constitutional Court of the Republic of Kazakhstan", the Constitutional Court of the Republic of Kazakhstan
Decides:
To recognize subparagraph 1) of paragraph 1 of Article 610 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code) as corresponding to paragraph 2 of Article 13 and Article 14 of the Constitution of the Republic of Kazakhstan.
To recognize the provisions of paragraph 2 of Article 13 and Article 14 of the Constitution of the Republic of Kazakhstan as inconsistent with paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan "On Taxes and other mandatory payments to the Budget" (Tax Code) in terms of the words "when filing an administrative claim, statement of claim (application) for such disputes", which lead to infringement and restriction the constitutional right of everyone to judicial protection of their rights and freedoms.
Before amendments are made to paragraph 2 of Article 610 of the Code of the Republic of Kazakhstan "On Taxes and Other Mandatory Payments to the Budget" (Tax Code), a state fee in the amount of 50 percent of the corresponding state duty rate for individuals established in subparagraph 1) of paragraph 1 is subject to collection from petitions of individuals for the review of judicial acts in cassation. Article 610 of this Code.
To consider that the gap that has arisen after the exclusion from the legislation of the Republic of Kazakhstan of instruments providing access to justice for citizens who find themselves in a difficult property situation (reduction in size, release, postponement, installment payment of state fees, and others) prevents the full realization of everyone's constitutional right to judicial protection of their rights and freedoms.
No later than three months after the publication of this regulatory resolution, the Government of the Republic of Kazakhstan should submit to the Mazhilis of the Parliament of the Republic of Kazakhstan a draft of the relevant law aimed at improving the legal regulation of the payment of state duties in courts.
To inform the Constitutional Court of the Republic of Kazakhstan about the measures taken within the specified period.
This regulatory resolution comes into force from the date of its adoption, is generally binding throughout the Republic, final, not subject to appeal and has no retroactive effect.
This regulatory resolution should be published in Kazakh and Russian in the official republican print media, the unified legal information system and on the Internet resource of the Constitutional Court of the Republic of Kazakhstan.
Constitutional Court of the Republic of Kazakhstan
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