ISSUING OF SALARY IN CASH NOT TO BE COUNTED AS EXPENSE
26 April, 2012
ISSUING OF SALARY IN CASH NOT TO BE COUNTED AS EXPENSE

Amendment will be introduced to clause 106 of ‘Tax Code’. As to the cases when to extract the in-cash-paid-salaries from the total gain, will be determined in future by a legal act issued by Finance minister.

Levan Kalandadze, expert in economic issues: 
- Georgian legislation stipulates simplified taxation for some entrepreneurs who carry out certain economic activity; for them book-keeping and accountability is not necessary. Consequently, these people enjoy simplified taxation and paying of income tax, according to the code,

is not obligatory for them.
It’s a bit hard to understand how the current condition and tax regime offered by Revenue Service and Finance Ministry will fit in this new initiative. And there is one more – technical issue, the problem directly connected with getting of salary. The bank transactions today make no problem and the employer transfers the sum to the employee’s account, his/her plastic card. But withdrawal of the sum becomes somewhat problematic when the issue is seen on a regional scale. Using of ATM is no problem in regions as practically every regional center is more-or-less supplied with bank infrastructure. But when it comes to village-type settlements, the inhabitants every time have to go to the regional center to get the sum put on the payroll. In absolute majority of Georgian villages there are no ATMs.
It’s also to be considered that many villages are rather far away from the regional centers. The issue is also complicated due to different tariffs set by banks for using the ATMs. All this may cause inconveniences, thus while regulating this by a legal act, technical issues are to be considered by all means. Otherwise we may face discomfort that can provoke the situation when some enterprises leave the money that was to be paid as a salary without accounting and not include it in expanses.
Q. – It often happens so that amendment enters the law but the content of legal act isn’t known. Afterwards it is determined by a high-ranking functionary. Conversely, a legal act does stipulate the area of its functioning.
A. – Unfortunately, it’s a usual practice in Georgian law-making when certain norms enter a law but afterwards legal acts regulate concrete issues. I presume that this causes double interpretation of issues and misunderstanding in our society. The whole tax code is founded on such principle; some issues are stipulated by the law but their interpretations are regulated by instructions given in legal acts.

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