The Constitutional Court (CC) has declared unconstitutional part of the Tax and Insurance Procedural Code (TIPC) providing for the unified revenue account, introduced in 2012 by former Finance Minister Simeon Djankov.
The CC has considered the request for declaring the contravention of the Constitution by the unified account for payment of tax and social security obligations. Grounds for the decision is expected to be published soon.
With the unified account introduced in TIPC January 2013, all payments made to the account of the debtor are used for the payment of his/her oldest obligations, regardless of whether for tax or insurance.
According to the CC the unified account represents threat to the rights of the insured people in the country and violates the principle of the rule of the law. This is because a person paying for retirement, unemployment, sickness, may well end up with that money being used for repayment of old tax liabilities.
We are yet to witness whether the National Revenue Agency (NRA) would be able to make a quick transition to the previous system adopting tax or insurance payments from citizens and legal entities without causing problems and inconvenience for payers.