Constitutional Review - One Year Later

What kind of legal certainty for citizens and the economy can we even talk about if requests for a constitutional review, which are given an absolute priority, are not resolved after more than a year?

This is what the economic and agricultural organisations of the initative "Gospodarski krog" are wondering about. More than a year ago, the National Council of the Republic of Slovenia submitted a request to initiate a procedure for the constitutional review of the Income Tax Act, which, according to the members of "Gospodarski krog", is unconstitutional in several articles, to the disadvantage of citizens. At a time when the government is undertaking a reform of the tax system, it is extremely important that the government receives a clear message as to which of the existing articles may be unconstitutional, so that this practice is not prolonged. We therefore expect the Constitutional Court to rule as soon as possible on a matter that affects every taxpayer.

We are aware that the Constitutional Court of the Republic of Slovenia is struggling with a shortage of staff and that it is dealing with an extremely large number of cases. Recent data show that this is also due to "irresponsible" decision-making by Members of Parliament. Last year, the National Council of the Republic of Slovenia, which represents social interest groups and local interests, voted eleven vetoes on laws passed by the National Assembly of the Republic of Slovenia. Seven constitutional reviews have been lodged with the Constitutional Court of the Republic of Slovenia. These are record numbers, as the National Council of the Republic of Slovenia has never issued so many warnings to the National Assembly of the Republic of Slovenia. At the same time, we are concerned that, in the case of many laws, it is easy for MPs to overlook the voice of both the actual profession and their own Legislative and Legal Service, which points out that the draft acts deviate from the Constitution and the rule of law. If this is due to ignorance of the Constitution on the part of the elected representatives of the people, this is worrying, and it is completely unreasonable if it is due to deliberate ignorance of the legal order because it does not correspond to the partial or ideological views of each power. Whatever the reason, the fact remains that the legislative branch of government, through frequent and ill-considered legislative amendments, is contributing abundantly to reduced legal certainty and the well-being of all, by restricting the rights of individuals and undermining the competitiveness of Slovenian businesses.

The current, and in our view unconstitutional, Income Tax Act has already harmed many employees. For example, by the end of 2025, an employee with an average salary will be left with a total of €1,170 that would otherwise have been left under the previous regime. From this year, all minimum wage earners will also be worse off as a result of the unchanged general tax allowance. In the meantime, these same working-age people have ensured that an additional €1.5 billion has flowed into the state budget last year compared to 2022 in social contributions alone (€740 million more), income tax (€280 million more) and payroll taxes (€500 million more than in 2022). At "Gospodarski krog", we believe that people deserve to keep much more of what they earn. The inability of the state to organise and de-bureaucratise itself rationally, and its constant demands, are unfortunately leading to declining human well-being and reduced economic growth in Slovenia.

In March, the 16th organisation, the Tax Advisory Chamber of Slovenia, joined "Gospodarski krog". Its Chairman Ivan Simič said: "Gospodarski krog is a movement that brings together organisations that care about the business environment we live in. Slovenia is a land of opportunity, but unfortunately the bureaucrats, with their bureaucratic regulations and ever-higher taxes, are distancing it from the developing world of business. We want a predictable and stable tax environment, with taxpayers at the forefront, who are contributing to the state budget. That is why we at the Tax Advisory Chamber Slovenia have decided to join Gospodarski krog and contribute our share to creating a better business environment in Slovenia."

Gospodarski krog is an inclusive platform for business and agriculture, with a clear desire to bring together all those who want to work together, with the common goal of being a strong alliance for a prosperous society in Slovenia. We will continue to be an advocate for dialogue and informed decisions that are in line with the rule of law and the ambition of a better business and living environment.