“Culture resurrection” or unconstitutional contributions? l5n5g
Raluca Tudoroiu, Senior Associate, RTPR 4i5a35
Starting from 3 November 2022, economic operators in the field of gambling, including the remote side, are obliged to pay a monthly contribution of 0.5% of the revenues. This was introduced by Law no. 286 of 31 October 2022 amending Ordinance no. 51 of 11 August 1998 regarding the improvement of the system of non-reimbursable financing of cultural projects (OG 51/1998) and seems to have the purpose of “resurrecting” cultural projects affected by the consequences of the pandemic. 4v6r1s
The contribution is paid monthly to the National Cultural Fund, until the 15th of the following month, based on the statement submitted by the payer.
“The large-scale and important cultural events that will take place in the coming years”, along with the “devastating effects of the pandemic on the entire cultural field” are the justifications that seem to have led the Romanian legislator to perceive this new contribution. The statement of reasons restates the same arguments when explaining the urgent nature of the measure, at the same time adding the need for the existence of a “simplified and transparent” mechanism for financing cultural projects.
To qualify the new contribution as a symbol of legislative predictability and transparency seems an ambitious undertaking.
Which revenues should be considered? If for class 1 licensees the gambling legislation contains a definition of gambling revenues that can serve as a basis for calculation, this does not apply to class 2 licensees. The answer could result from the secondary legislation that is to be adopted, but it should be done in a way that respects the principle of non-discrimination of the payers, in order to avoid threatening the constitutional character of the regulation.
Where are the revenues made? It is reasonable to expect the application of the 0.5% only on revenues produced in Romania, but their actual determination will have to take into the multinational activity of the players in the gambling field. Otherwise, the contribution would become not only excessive, but also a potential unjustified withholding of significant amounts.
Is the regulation transparent? The general reference to the cultural projects that will be organised at a national level creates the appearance of a beneficial regulation, but in reality, the statement of reasons omits to mention the exact manner in which the contributions of economic operators in the field of gambling will lead to changes in the status quo. Even the website of the institution that will benefit from these contributions is not clear in detailing the impact of the cultural projects it has previously financed or the reasons why the amounts already collected from the rest of the payers were insufficient for its activity. In fact, the promotion of the cultural sector by educating the population or the more efficient allocation of already existing resources seem to be sufficient tools for “reviving the cultural sector, eroded by debts, distant from consumers and seriously threatened by the danger of lack of professionals”, and in the absence of specific evidence regarding the need for additional funds, the new contribution seems rather excessive.
Nevertheless, it is not clear how gambling operators were chosen as the subjects of this contribution in comparison with other sectors of economic life. Such a justification would have been welcome, as in its absence we could only conclude that the choice was a subjective one rather than based on objective criteria, with the potential to achieve the goal declared by the law.
Is the regulation predictable? If we take into the history of taxes, contributions and other amounts collected from gambling operators, we can only answer in the affirmative: only in the last months they have changed several times both in of the amount and in of the method of payment and the final beneficiary. The changes by which gambling operators began to “” the Olympic and Paralympic Committee (aren’t these under “cultural projects”?) and licence fees have increased are still warm, while the level of taxation of players remains a constantly debated topic.
However, this is not what the constitutional regulations refer to when they establish that the law must be predictable, transparent, and non-discriminatory. In order to the fulfilment of the constitutionality conditions, the economic operators have the right to address the competent courts, by challenging the writ of execution on the basis of which the contribution will be charged. During the civil proceedings, the operators have the right to question the compliance of the contribution with the fundamental law, by raising the objection of unconstitutionality. Until then, we hope that the secondary legislation will clarify more of the ambiguities raised by the new regulation and, respectively, that the winter holidays will not bring additional “gifts” to public institutions or istrations by further taxation of the gambling sector.
