New economic course - reminder of old blemishes
16 December, 2010
New economic course - reminder of old blemishes

Georgian government acknowledges defects in communication policy of government with the private sector and pledges to become a partner to business henceforth.
Much trumpeted “new economic course” of Georgian government aimed at creation of fair, simple and trustful taxation system looks to business like a guilt confession rather than a new strategy. 
On December 3, 2010 during the opening ceremony of a new Customs Clearance Zone (CCZ) in Lilo, outskirts of Tbilisi, Mikheil Saakashvili, President of Georgia, acknowledged that Georgian

business has been suffering of unfair treatment on the part of tax administration [who frequently misused its power] and pledged that government undertakes a new business-oriented economic course insuring business-friendly environment to private sector from this time forth.
Three key components including new tax code, state-of-the-art infrastructure of CCZ [introducing one-step-window supposed to be deployed across the country  so as to spare importers of week-long demurrages at customs terminals by minimizing customs-clearance related expenses and timelines], and retrained personnel of taxation body is supposed to ease life  to business.
Georgia, put among top-leaders of Ease of Doing Business rating of World Bank for the last 3-4 years [thanks to liberal economic reforms undertaken by government] is of notorious fame among investors by a tax-administration crack-down on business. Transparency International Georgia (TI Georgia), a non-governmental watchdog, having researched Georgian taxation system this spring came to conclusion that Georgian taxation system is one of the key perils creating setbacks to economic development of the country once the imperfections of the existing tax system lay ground to tax terror and scared investors off.
Georgian business together with economic analysts have been hailing government for years that not the tax rates are the problem but the administration of taxes, that the currently active tax code is hardly understandable, includes dubious paragraphs leading to double interpretation and crack-down on business , but to no avail. Their voice was like the voice in the wilderness as Government strongly believed that the tax administration was smooth and fine. The ice melted this summer when Georgian authority acknowledged at last the tax code problems and rewrote it into a new one. The new code [that enters into effect next year] introduces an institute of business Ombudsman to protect  private sector  from the state crack-down although still ignores the key demand of private sector – presumption of innocence of business [built in all possible tax codes globe over]. It means that tax administration still is empowered to accuse business based on bare presumptions and business has to prove its innocence. Moreover, penalty rates increased, the taxation base got enhanced, and double-interpretation problem remained.
In October Revenue Service staged a real witch-haunt on petty traders, arrested hundreds of trades-people at Bazroba under pretext of tax-felony and imposed unreasonable penalties. Economic analysts argued that the inadequate punishment policy undertaken by revenue service might kill out petty business completely.
Now out of sudden government trumpeted the launch of “new economic course” that must settle all business-problems in 4-5 months after the new tax code enters into effect starting January of 2011 as Kakha Baindurashvili, Minister of Finances, said while advertising the new course through the whole  past week.
On December 13, 2010, Baindurashvili introduced the new course to MPs behind closed doors, and once more reiterated that the upcoming tax code insures establishment of partnership between the business and tax bodies. He underlined that the new code distinguishes so called “honest principle” that forgives an inadvertent tax-felony to innocent infringers. Moreover entrepreneurs paying at least GEL 200 thousand of Value Add Tax (VAT) in the state budget are exempted from VAT on import. Moreover tax-payers are empowered to ask tax-officers to implement a taxation check in the period most convenient to businessmen.
Economic analysts say the new economic course is nothing new in fact but a reminder of old problems. Davit Narmania, Executive Director of the Institute of Caucasus Economic and Social Research, thinks the recent much-ado is a PR campaign rather than a breakthrough in governmental mentality.
“I have no idea why do they need this PR campaign now but there is definitely nothing new in this economic course, government just acknowledges the tax administration problem we have been hailing for the last 3-4 years and that government has been refuting so obstinately,” He said.
“Where’s the novelty?” Levan Kalandadze, Director Executive of Georgian Association of Small and Medium Business, asked Georgian journal. “We have been accentuating on the tax administration problems starting the day old tax code was entered into effect but government persistently used to deny it. Government lacked due communication with business because it talked only with big business ignoring SME sector meantime. As per newly re-equipped CCZ government is obliged to develop a modern customs clearance zone infrastructure after all. The single new thing is authority confessed its mistakes and acknowledged that tax administration must be simpler and milder, that makes me hopeful that maybe things really can get better array.”

Print
Other Stories
Doing business in Georgia has become easier than in America
According to the Doing Business 2019 report published by the World Bank, Georgia ranked 6th among 190 countries in terms of simplicity of doing business. This was an improvement over two ranks compared to last year.
Innovative and reliable online shop in Georgia - Momitane.ge
Status of Georgia as a business and tourism interesting country is growing from year to year.
Tbilisi TV Broadcasting Tower – Better than the Eiffel Tower?
It is planned to renovate the Tbilisi TV Broadcasting Tower, one of the landmarks in the capital.
Georgian Fusion Menu by The Biltmore Hotel Tbilisi
5,895,914 international visitors have visited Georgia between January and August of 2018. Compared to the previous year the number has increased by 12.2 per cent.
Advertising of gambling and lucrative games may become banned in Georgia
Advertising of gambling and lucrative games may become banned in Georgia. Those who violate the new rule would be fined GEL 10 000.
Lebanese café-lounge Beirut opens in Tbilisi
What is necessary to organize an unforgettable event? – Fun, emotions, lots of surprises, good music and delicious menu.
Georgia second among the fastest growing tourist destinations in Europe
Georgia is among the fastest growing tourist destinations in Europe. The data is published by the UN World Tourism Organization.
Bitmain launches world digital mining summit in Tbilisi, Georgia
Bitmain CEO Jihan Wu and Roger Ver, CEO of Bitcoin.com Head Speaker List featuring Circle, DEX.top and Genesis Mining when Digital Mining Leaders Convene In Tbilisi on September 21-23
GAZELLE FINANCE GEORGIA AND TBC BANK HELP THE WESTERN REGIONAL CENTER OF MODERN MEDICAL TECHNOLOGIES EXPAND ACCESS TO QUALITY HEALTHCARE SERVICES IN KUTAISI, GEORGIA
TBC Bank and Gazelle Finance have teamed-up to support Medical City, a leading healthcare provider in the western region of Georgia to launch the Western Regional Center Of Modern Medical Technologies.
Equivalent to buried treasure – resources that are underused in Georgia
For 2018 the IMF Commission has forecast an annual economic growth for the Georgian economy of about 5,5%.
Does the quality of Georgian wine increase and how the export affects it
If we look at the data collected about modern Georgian wine, we will find out that the Georgian wines produced between 2015-2017 are much better in terms of their quality and Oenologic features rather than the wines produced between 2009-2011.
Japan simplifies the visa requirements for Georgian citizens
Diplomatic and economic relations between Georgia and Japan are now moving to a new phase. Recently Japan has decided to simplify the visa requirements for Georgian citizens.
M&S (Marks and Spencer) and H&M collections to be produced in Georgia
Garments manufacturer MGMTEX will start production of the M&S and H&M trendy collections from this September.
The World Digital Mining Summit to be held in Georgia
The summit is scheduled to take place between 21st-23rd September in the Hualing Hotel, Tbilisi, Georgia.
Galt and Taggart - Tourism Boom Continues in Georgia
Tourism has become one of the key drivers for the Georgian economy. Galt and Taggart has recently published research about the Georgian tourism sector in the first half of 2018.
"The worst dream for Putin is that Russians want to live in Georgia"
This year, visitors to the Adjara region would notice that there is a boom in construction in and around Batumi.
Underground gas storage facility to be built in Georgia
KfW, a German government-owned development bank signed a EUR 150 million promotional loan with the state-owned Georgian Oil and Gas Corporation (GOGC) for the construction of the first underground gas storage facility in Georgia.
New gambling rules for Georgia
Georgian lawmakers are preparing a new draft law relating to online-casinos and gambling that will seek to curb gambling addiction in Georgia.
How expensive is it to visit Georgia?
The Georgian Lari (GEL) is the official currency of Georgia and is the only legal means of payment in the entire territory of Georgia.
Trade with the EU and the Commonwealth of Independent States (CIS) has grown significantly
Trade with the EU and the CIS has grown by 26% and 33.5 % respectively, says GeoStat, the Georgian National Statistics Office.
The unemployment rate decreases in Georgia
The unemployment rate decreased in Georgia by 1,9% and amounted to 12.1% in the 2nd quarter of 2018 compared with the previous quarter,
Memorandum of Understanding to be signed between Georgia and Malaysia
According to the Georgian Ambassador to Malaysia Nikoloz Apkhazava, Georgia plans to sign a Memorandum of Understanding (MoU) with Malaysia.
“Blauenstein Georgia” due to expand in Georgia
“Blauenstein Georgia” is planning to open more shops in Georgia. It is an agriculture company that sells meat products, meat and convenience food.
The amount of Direct Foreign Investment rises in Georgia
According to the information of the National Statistics Office of Georgia, the amount of direct foreign investment in Georgia has risen
It’s going to get  harder for foreigners to get residence permit in Georgia
It’s going to get harder for foreigners to get permit of residence in Georgia.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
12.11.2018
13.11.2018
USD
1
USD
2.7146
2.7166
EUR
1
EUR
3.0800
3.0602
GBP
1
GBP
3.5325
3.4900
RUB
100
RUB
4.0430
4.0131
Other Stories
Recently Toyota rolled out Global Campaign under this slogan that reflects the Olympic and Paralympic Spirit of Encouragement,
A couple from Switzerland combines Swiss tradition and technology with Georgian products. Their cheese is made in the Georgian mountains and sold in local stores and hotels.
It has been more than five years since the residents of Lilo village, near Tbilisi, cannot open their windows.
63 000 GEL was received by the Georgian Agro Export Group which is just a small part of the European Neighbourhood Programme for Agricultural and Rural development.
Georgian entrepreneur Guka Tavberidze, who runs his own business in the UK and does it quite well, has been invited by BBC
The grand opening of 7-star The Biltmore Hotel Tbilisi took place in Georgia’s capital on July 31.
DUSHETI, Georgia – The Georgian government and the World Bank will allocate USD 5.6 million (12 million GEL) to fund
A new Georgian clothing brand named Person has emerged in Georgian market.
Georgia is in the midst of an economic maelstrom, Euronews reports.
Situation at Georgia’s mineral water market is interesting: over the last year, the volume of export has grown by 56 percent. According to “GeoStat”, over $114 million worth of mineral water was sold
GEL Exchange
USD
1
USD
2.7166
EUR
1
EUR
3.0602
GBP
1
GBP
3.4900
RUB
100
RUB
4.0131
November 2018
Mon Tue Wed Thu Fri Sat Sun
1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30