საქართველოს მთავრობა|Government of Georgia

On April 13, 2011, the Prime Minister of Georgia, Nika Gilauri, met with representatives of member companies of the Business Association of Georgia at Sheraton Metechi Palace Hotel. Novelties planned in the field of taxation were presented at the meeting.

We present the Prime Minister's speech:

"I would like to thank the new Head of the Revenue Service, Jaba Ebanoidze, as he could show important initiatives, move forward very important and painful problems for the private sector and propose (ways of) their
solution within a very short period of time after his assignment to this position.

We have worked with the private sector holding a lot of meetings by the Revenue Service, as well as by the Ministry of Finance and me. We have identified several problems the private sector is particularly concerned about. We suggest a very effective way to solve these problems.

The New Course initiative we announced in November of the last year is still being continued. After this, we have offered a lot of novelties to the private sector, e.g. a new Tax Code, which was drawn up in coordination with the private sector. These novelties are still going on. We would like to solve any problem in the relations between the private sector and the Revenue Service.

Of course, all this is not to be done in one day; this requires a certain period of time. We will offer the public and the private sector several more novelties during the next months.

The first and one of the most important novelties we have presented today is the outsourcing of audit. If a company desires, it can apply to other private auditing or consulting firms holding licenses to carry out its audit instead of the Revenue Service. The auditing or consulting firm shall have taken a license at the Revenue Service.

They declared that the tax inspection raided into their companies, sealing their offices and making troubles for them. Because of this, their sales have been decreased. This will be completely eradicated. If private companies desire, they will be inspected by auditing or consulting firms. The audit report drawn up by such firms shall be considered as reports checked by the Revenue Service.

The initiative is in a pilot regime. Piloting will be carried out during the next 3-6 months. After these 3-6 months, any private company will be able to conduct its audit in this regime.

Another very important initiative is: if a company is inspected by auditing or consulting firm, it shall not be charged by a part of penalties, while if it is inspected by the Revenue Service the penalties shall be fully charged. We would like to motivate the private sector to apply this initiative soon. Price shall be established by the market itself. There will be several auditing and consulting firms in competition with one another with respect to the proce. We are not determining the price.

One more novelty that will be very interesting to the private sector is connected with technical loss. If a company had any technical loss, it was frequently considered as realization. This was a problem of a wide range.

We will create a Technical Losses Commission which will determine amount of technical loss in different companies or sectors. Consequently, the companies' tax burden will be reduced. Companies will have an opportunity to apply to us and ask for defining their technical loss for a certain fee. In the future, when the company is checked by the Revenue Service, the latter will consider the technical loss and charge fewer tax.

There is one more initiative. The issue of writing off fuel prices was quite complicated. A company was using fuel for its commercial activities but frequently, the Revenue Service was not taking into consideration the fuel costs in its accounting. According to the new initiative, a certain procedure of writing off is already established. Any company will be able to carry out the procedure from the next week.

These are the three new initiatives with respect to the problems the private sector was concerned about. This is known to us as we are conducting active dialogues with the private sector. We will propose the public several new initiatives in the nearest months."

 Prime Minister's Press Service