Scholarly record

INADMISSIBILITY OF PENAL AND CONFISCATORY TAXES

Sonja Cindori, V. Kuzelj

Abstract

In modern times, paying taxes is deemed an indisputable fact. However, the development of the fiscal state has not abolished disputes over taxation nature and its fairness. While it is generally agreed that taxes should be paid, there is still an issue regarding how high tax rates should be. The key issue is to determine the critical shifting point for taxation targets: from settling public expenditures to confiscation of an individual’s property and, potentially, the punitive role of tax. The problem should be addressed in an interdisciplinary way – from the standpoint of financial and constitutional law. Just as most of the post-war constitutions adopted in the second half of the 20th century, the Constitution of the Republic of Croatia contains provisions on socio-economic rights, including those that define tax system. In addition to taxation principles, there are also provisions which represent the limit of fiscal sovereignty of the state, the meaning and scope of which can be interpreted from the jurisprudence of the Constitutional Court. In 2001, Croatian legislator introduced three tax forms with all the characteristics of penal taxation. Introduction of such taxes means that the final limit of the elasticity of fiscal sovereignty of the legislator was overstepped. The Constitutional Court of the Republic of Croatia decided on the law introducing these tax forms, and the decision on its (non-)constitutionality reveals principles that truly represent the limit of the fiscal sovereignty of the legislative authority, simultaneously determining the relationship between the right to private property and the right of the state to impose tax liability.

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