The tax execution process remains indefinitely pending and taxpayers are at the disposal of the coercive manoeuvres of the tax execution body for ever and ever.
Paying taxes is a fundamental duty for us all. An unavoidable duty in the contemporary state, which increases in extent and intensity, supported by a tax machine increasingly sharpened for collection.
However, for reasons of certainty, security and legal peace, it is certain that for the state to legally act coercively against reluctant taxpayers, there is a deadline. After this period, tax obligations are extinguished and the Tax Authority’s collection services are no longer able to collect this revenue.
This is the statute of limitations, which is legally enshrined in our legal system within the framework of taxpayer guarantees. And due to which, in accordance with the principle of tax legality, the tax enforcement body is obliged to recognise this of its own volition and declare the extinction of the tax obligations under execution.
However, according to the most recent line of reasoning adopted by our venerable Supreme Administrative Court, the limitation period guarantee is no longer an attainable reality for taxpayers and has become, so to speak, a legislative utopia.
For this jurisprudential understanding (supported by the legal hermeneutics of the tax-legislative text that does not lead to the best application of the law), once the debtor is served with a summons for tax enforcement, the act of summons has a double effect in relation to the limitation period: (i) an instantaneous interruptive effect, provided for in the General Tax Law, and (ii) a lasting suspensive effect until the tax enforcement proceeding has a final decision with res judicata through the subsidiary application of the Portuguese Civil Code.
In other words, the application of this interpretative reasoning (of the subsidiary application of the Civil Code as an interruptive fact for the purposes of the summons in tax enforcement proceedings) means that the time limit interrupted with the summons of the defendant will not be resumed, thus postponing the limitation period sine die. As a result, the tax enforcement proceedings remain pending indefinitely and the taxpayers remain at the disposal of the coercive manoeuvres of the tax enforcement body throughout all time. This cannot fail to cause enormous perplexity among common citizens.
With all due respect, recognition of this double effect (instantaneous and lasting) for the interruption of the limitation period as a result of serving the writ of summons appears absurd and inadmissible, expressly and uncontroversially violating the guarantees of the taxpayer and the principles of legal certainty and security, which are inherent to the principle of the rule of law, enshrined in Article 2 of the Constitution of the Portuguese Republic.
By posing the present question as “why are tax debts no longer time-barred?”, in addition to defending the systematic interpretation and the search for consistency between legal rules, an attempt is being made to include the constitutional status of the individual who receives such a summons within the scope of the legal-tax debate, who is visibly overlooked in the face of the continuous and rising tax demands (according to data on the growing proportion of state tax revenue as a percentage of GDP).
In fact, the defendant’s status as a citizen calls for both fundamental duties and rights. Indeed, while, on the one hand, the state is, by force of the Constitution itself and by imperatives of reality, a tax state (i.e., a state whose fundamental financial means of support derives from taxes), on the other hand, effective barriers to tax power are required. These barriers require a correct and contextualised interpretation of tax law and involve the intervention of material principles such as tax equality, ability to pay, respect for fundamental rights, etcetera.
In conclusion, this contested jurisprudential understanding is understandable with regard to the conception of taxes with the main objective of obtaining revenue. However, this extra fiscal instrumentalisation of tax law, insofar as it is conceived as admissible, cannot fail to be guided by other requirements, particularly those relating to the guarantees of taxpayers and the principle of tax legality, which must be respected and defended.
in Jornal Económico newspaper
26th October 2018