Witch-hunt on petty business goes ahead
28 October, 2010
Witch-hunt on petty business goes ahead

Petty traders of so called Lilo Bazroba located in the outskirts of Georgian capital protest against the crack-down practiced by the Revenue Service.

Georgian experts agree that not everything is smooth and fine among petty traders but they suspect that Georgian tax service misuses its authority and resorts to inadequate measures.
Georgian Revenue Department at the Ministry of Finances of Georgia (MOF) decided to get over all kinds of contraband and financial crime in this October.
Shortly after mass arrest of

petty traders in the center of Tbilisi, Kidobani and Passage market malls [staged on October 5, 2010] Georgian tax officers deployed another crusading campaign against tax-felony at the biggest marketplace of Tbilisi dubbed as Lilo Bazroba where about 3700 petty traders run their business.

 


About 300 petty traders running counters at Lilo appealed to the Trade Union [of self-employees and petty traders employed in trade and individual business] for help on October 21, 2010. The offended traders claimed that the tax-inspection locked bigger part of shops during its regular check of the market causing a big agitation that stumbled the working process of the entire market including honest tax-payers.
The problem is that some traders whose shops were closed were taken under custody that morning that led to hand-in-hand combat with the police.  Oppositionist Political parties also were involved in the battle and all ended in a big mishmash ultimately rather aggravating than discharging the situation at Lilo market.


Due to price hike on products the purchase power of population reduced and people avoid extra expenses and focus on food mainly while the bigger part of Lilo traders trade by clothes, shoes, and underwear. And the unpleasant circumstances affected the yet reduced turnover of clients at the “crime spot”. Clients shun the place that swarms with agitated people and police officers, the concerned Lilo traders claimed in their appeal.  As a result the trade activity dropped badly affecting incomes of traders who scarcely make two ends meet and have to pay off banking loans. 
“In case if the honest self-employees are deprived of a chance to continue their activity the Union will protect their rights via legal means,” The Trade Union official announcement paper reads.
According to Georgian Journal’s incognito source, contraband is still a serious problem to Georgian government specifically at Azeri border and 90% of contraband having passed across this border   goes to Lilo Bazroba actually. And very likely government decided to crack on shadow business at Lilo and bleach it all in all.
Giorgi Tskhakaia, Head of the Revenue Department, refused accusations that someone was arrested at Lilo. He assures that the tax service has just been implementing a regular inventory based on the request of Kutaisi traders who claimed that they cannot get the goods ordered at Lilo for they lack due papers attached to the procured stuff. He eluded direct comments respective the presumption that Lilo swarms with contraband. Top revenue service official just elaborated that they combat contraband.
“We decided to implement a control purchase at Lilo and found out that many of the traders lacked due documentation of [imported] goods, they could not present  bills of lading  and we closed the suspicious shops for  inventory for 2 days as the law envisages. That’s the full story,” Tskhakaia told Georgian Journal on October 22, the next day of the “tax crusading” campaign disturbed Lilo inmates and assured that all is still and calm at Lilo. However about 3 thousand traders went on protestation strike that day to express their sympathy to offended colleges and demanded fixed taxes lest avoid crack down of tax service in future.
Economic analysts do not rule out that the locked businesses really practiced contraband or eluded taxes and that this kind of illegal practice must be punished, but they believe tax-service misuses its power.


“May be there are some unregistered goods at Lilo that must subdue to legal administration and registration but government should not implement preventive measures on the expense of law-abiding tax-payers. The recent confusion at Lilo affected honest traders,” Davit Narmania, an economic analyst with the Center for Economic Policy Research, explained to Georgian Journal.
He believes that the double-interpretation of tax code lays ground to misunderstanding and confusion and that should be retrieved if the state really wants to regulate situation and enable business to work.
“There should be clearly written [in the tax code] when the state has a right to check business, how often, and when the emergency checking is admitted. And the business would be aware that if one does not pay due taxes you are supposed to be checked. This is not only Lilo problem, this is a legislative gap,” Narmania elaborates.


Levan Kalandadze, Executive Director of Georgian Small and Medium Business Association, thinks that government needs to make difference between the petty financial felonies from criminal case.
“I do not doubt that some people elude taxes or lack some due papers, but it is not a criminal case and can be settled via penalty at place without much noise rather than take the culprit under custody as a criminal,” He said. “The financial crimes must be classified properly and preventive measures be adequate, nothing more.”
Gia Khukhashvili, an economic analyst, thinks government practices a crack-down on petty business as far as big business been lobbied by government, sees a competitor in small business.

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
21.09.2018
22.09.2018
USD
1
USD
2.6193
2.6216
EUR
1
EUR
3.0693
3.0854
GBP
1
GBP
3.4651
3.4584
RUB
100
RUB
3.9538
3.9340
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
2.6216
EUR
1
EUR
3.0854
GBP
1
GBP
3.4584
RUB
100
RUB
3.9340