TAX OMBUDSMAN BELIEVES POLICY WILL BECoME BUSINESS-FRIENDLY
15 December, 2011
TAX OMBUDSMAN BELIEVES POLICY WILL BECoME BUSINESS-FRIENDLY

Georgian government became really business-friendly after it realized that milder tax burden brought bigger budgetary revenues this year, Giorgi Pertaia, Tax Ombudsman of Georgia, believes. For many years Georgian businesses have been requesting  to set up Tax Ombudsman’s institute but without success. It came true  at last  last spring according to the initiative of the Prime Minister of Georgia, Nika Gilauri, who early this year pledged to keep close cooperation with businesses and tailor tax law to their interests. Whether or

not the government kept its promise and the Ombudsman’s Office met business’ expectations, Georgian Journal tried to find out in the interview with Giorgi Pertaia himself.

Q: Tax Ombudsman’s institute has been established at last this year. Business that has been craving for fair treatment on side of tax administration cherished great expectations. How has your office met expectations, is awareness high in business community?

A: Awareness is quite high and a large amount of people appeals for help, at least ten calls come in the office at hot line, much more calls to get consultations through our hotline, web-page and Facebook, we are available even on week-ends at Facebook. About 800 persons appealed already. We carried out a research recently that made clear that about 80% of researched companies know us and about 70% is ready to appeal for help if they face problems.  To my mind expectations are met as far as we have quite different picture in tax system at the moment compared to past years, and our office greatly contributed to it. But our efforts could be futile if not new tax administration management and policy because we are not decision makers, we just recommend. Government apparently changed its political will and comes on many of our suggestions. Some lingering taxation related problems like timekeeping, inventory, fuel deduction and production wastes are somewhat solved, not completely but from administration point of view the issue is apparently eased.

Q: Liberal changes were made to tax code before but administration remained as the Heel of Achilles. What makes you think administration gets simpler and new changes will be effective?

A: I have been involved in tax code issues for about last eight years but it is the first time when I do believe it will be effective, that they are not PR actions but real changes, because earlier law was changed in a good way but there remained gaps enabling  administration to be enforced incorrectly. Now there are some gaps in law but administration does not use these gaps to fine business as much as they used before. Nobody can work out a flawless tax code without gaps anywhere but administration should not be focused to choke business. And this seems improved. For example, the inventory-related paragraphs enable to fine all shops today but administration does not while earlier even smallest gaps were used maximally to impose penalties on business. Although government still comes with some changes that are controversial to the business-friendly policy they practice lately, not as frequently as earlier but they still do exist and puzzle me. The change to paragraph number 73 of tax code on indirect tools of imposing fines that is under parliamentary vision at the moment is so intricate and unclear that it unties hands to tax administration to impose millions worth fines.

Q: Small business feels discriminated about new cash registers that revenue service promised to deliver free of charge but some got them free and some have to buy. How do you think to assess this move?

A: Actually it is not fair because new cash registers ease life to tax service to have better control and only in theory it is better to business assuming that if tax service has better control it will seldom trouble business, but to lay the burden of payment on business for improved control mechanism is not fair, we discussed this issue with tax service but they stick to their position unfortunately.

Q: What makes you think government changed its policy then?

A: The biggest good thing that happens due to the underway new policy is that government got convinced that the milder tax burden leads to more profit not loss as their perception was before. We have been urging government to reduce tax burden for years assuring that income increases through increased economic activity, but counter-argument was that profit might occur after approximately 4 years and budget could not afford it. However this year they reduced burden and incomes increased likewise and they witness that it is a good thing. It is a breakthrough in governmental attitude and that the good result occurred in a year instead of expected four years, therefore it is a no-no to get back to old reality.

Print
Other Stories
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.
Mziuri Park in Tbilisi to be renovated soon
It was the dream of prominent Georgian writer Nodar Dumbadze that when the original Mziuri park was constructed and opened in 1892 that it should be a park for children,
Winemakers to produce Kvanchkara in its place of origin - Racha
Khvanchakara is a semi-sweet Georgian red wine which originates from Racha, in the western part of Georgia. Kvanchkara is made of two types of grape Mujuretuli and Aleksandrouli.
The level of Georgian wine and Chacha exported has increased
The National Wine Agency of Georgia has recently published statistical information about the level of Georgian wine and Chacha exported between January and July, 2018.
New fire engines to be Manufactured in Georgia
The Acting Head of the Emergency Management Agency Shalva Khutsishvili said that the old Zili fire engines (which were made in the USSR) will be phased out and replaced with new ones, manufactured in Georgia.
Georgia witnesses a record number of tourists
The Georgian National Tourism Administration publishes statistical information about international visits to Georgia.
Canadian businessman plans to build a hotel in Bakhmaro
Canadian businessman Vadim Malishev plans to build a hotel in Bakhmaro resort, Guria, in the western part of Georgia.
Coffee Factory will open in Tbilisi in October
The first coffee factory (which will be located on the Kakheti highway) in Tbilisi will open in October.
Places in Georgia where real estate is the most expensive
The real estate market in Georgia is growing annually. In Tbilisi as well as other regions of Georgia new developments are increasingly taking place.
How much does a vacation cost in Tbilisi?
It is the middle of summer and those who have not yet taken a vacation are looking for an appropriate place for sure!
The price for extreme sports in Georgia
Georgia offers a variety of options to extreme sport lovers.
The number of Georgians who own property abroad increases
The number of foreign properties owned by Georgians is increasing.
How much does Taxi cost in Tbilisi?
Stories how Taxi drivers try to deceive passengers and charge them with more money than they should pay are known for everybody all over the world.
What are the highest paid areas in Georgia
According to the data collected by the National Statistics Office of Georgia in the first quarter of 2018 the highest paid jobs in Georgia are found in the financial and insurance fields.
PHOTO OF THE DAY
Exchange Rates
GEL Exchange Rate
Convertor
17.09.2018
18.09.2018
USD
1
USD
2.6128
2.6156
EUR
1
EUR
3.0578
3.0498
GBP
1
GBP
3.4296
3.4259
RUB
100
RUB
3.8669
3.8379
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
2.6156
EUR
1
EUR
3.0498
GBP
1
GBP
3.4259
RUB
100
RUB
3.8379
September 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