Tax and Customs Law Will Be Separated
10 October, 2013
Tax and Customs Law Will Be Separated
The tax and customs codes integrated into a single one four years ago will be separated again in order to make things more transparent and customs clearance procedures clearer to business.
The initiative came from Minister of Finances Nodar Khaduri early this month. A working group is already created at Ministry of Finances of Georgia that will be coordinating the process. According to Khaduri, two key factors prompt the changes.
They aim to restrict the personal power of Minister of
Finances who in compliance with the active law is mandated to issue certain orders at his discretion at a risk of considerable bias. To escape this temptation, the changes take the mandate of personal decision-making from the Minister and pass it to the legislative body in order to make all important decisions based on the law rather than personal taste. Another key point, compelling the division of the tax code into two independent tax and customs codes is the EU requirement aimed at harmonizing Georgian legislation with the EU pattern that suggests separate customs legislation.
“As for the conceptual part of the legislation division, key principles are not outlined as yet but the issue will be open to public discussions,” Khatuna Ivanishvili, a spokesperson of Finance Ministry, told Georgian Journal.
The sector pundits refrain to make comments until key points of the upcoming changes will be outlined but they say that the important thing is to simplify, not complicate the current procedures for the entrepreneurs. Works on integrated tax and customs codes was initiated by the liberally disposed former authorities in 2006. However, the united code entered into effect in 2011. The initiators of the united code believed it made things simpler and eased life of businessmen. Yet the customs pundits complained that after integration of the two codes, the legislation became eclectic and customs procedures were often interpreted less thoroughly while a significant part of information was dismissed to make the code smaller. Moreover, customs-related paragraphs were disseminated throughout the code unsystematically. All these continuously prayed at the slim time margin of importers and entrepreneurs struggling to realize how to handle particular procedures.
“As a matter of fact, I welcome the initiative to restrict the clout of the Minister and give a broader mandate to the Parliament,” Bondo Bolkvadze, a customs analyst, said in the interview to GJ. “I also approve of the idea of separating the customs and tax laws because it would make things clearer for businesses, even though most developed countries also employ the unified code. Someone decided years ago that customs code should not be more than twenty pages and puzzled the businesses because the information is scattered here and there in the tax code.”
According to Irakli Lekvinadze, an economic analyst, it does not matter much whether or not the customs and tax codes will be separated or not if major principles will be simple and liberal. “The crucial thing is to retain the currently operational one-stop-window principle of customs clearance that is very effective. Decisive factor of efficiency of customs and tax legislation is their principles, not their form,” he said.
At the moment, it is not clear when the separated codes will be enacted. MoF cannot provide even a tentative timetable. Ivanishvili says that the process will be most likely accelerated after the presidential elections scheduled by the end of this month.
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