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Tax amnesty offers unfair reward for tax dodgers

By Gvantsa Gabekhadze
Wednesday, October 17
Aleksandre Khetaguri, the acting Minister of Finance made a statement regarding a new tax amnesty for Georgian broadcasters on October 15. According to the outgoing minister, all broadcasters should apply to the Ministry of Finance for a reduction in their debts or fines. The statement was been followed by “large scale” criticism from various broadcasters and NGOs, calling the decision politically motivated, unfair and targeted towards specific TV broadcasters.

Khetaguri stated that such decision would ensure putting all the television stations in equal tax conditions and would assist broadcasters in maintaining a stable financial situation and encouraging competition on the TV market.

It should be pointed out that it is not the fist example of declaring financial amnesty for the broadcasters. In July 2010, parliament passed a tax amnesty for all Georgian TV stations, erasing GEL 36 million in unpaid debt off the books of TV outlets. No information about the companies benefiting from the amnesty was released, but the step was widely believed to benefit mainly Rustavi 2 and Imedi. Those TV channels which are assumed to be government affiliated. It was stated that the three Georgian broadcasters Rustavi 2, Imedi TV and Georgian Public Broadcaster were cut that GEL 36 million.

Various representatives of several TV and printed media companies have already called the statement discriminatory and emphasized that they would fight the decision.

According to Bacho Kikabidze, General Director of Maestro TV, the TV channel does not need any amnesty programs, as they have already paid all their taxes.

“No one would forgive us for not paying the money,” Kikabidze stated. He underscored that the decision is related to the loss of the previous government.

“Rustavi 2 and Imedi TV are owned by the former government and now they want to be freed from their debts. It is very hard to talk on equal conditions for all broadcasters when even the commercial market has been monopolized by the two broadcasters for the last nine years,” Kikabidze stated.

Practically the same has been stated by the repersnetative of Kavkasia TV, Nino Jangirashvili. She has demanded the ceasing of the process.

Jangirashvili has expressed surprise how the broadcasters could accumulate such taxes.

“At one point, our account was sequestered two times in a two day span. In one case, our debt consisted of only 2 laris… I am interested in such a situation when we have been so strictly controlled and those broadcasters managed to accumulate millions of GEL in debt,” Jangirashvili said.

Jangirashvili underscored that fulfilling such a decision would be the same as Rustavi 2 and Imedi being free from taxes for 9 years “and we, like real fools, are paying for everything,” Jangirashvili stated.

Editor in Chief of Rezonansi newspaper, Lasha Tughushi, called the action criminal and discriminatory as well. He was also interested in why the soon-to-be former minister is trying to carry out such a decision.

Nominee on the Finance Minister’s post from the Georgian Dream, Nodar Khaduri, said that the statement would be looked over and the Ministry of Finance will have to present concrete materials publicly on how much debt was erased and from which TV channels.

“A Special Investigation Commission will be created by the Parliament and chaired by Tina Khidasheli and everything will be cleared out and information will be provided to people concerning this issue,” Khahduri said.

A special statement concerning this issue was made by Transparency International Georgia. According to the NGO, a tax amnesty rewards those companies which do not pay their taxes and creates an unfair competition environment. This is because many TV companies pay all their taxes, while those TV channels that enjoy political backing, continue to get away with not paying them.

“This risk continues to exist. Rustavi 2, Imedi and several other TV channels are owned by individuals close to the United National Movement party and recent reshuffles in media ownership indicate that the television sector will continue to be politically polarized. The family of the incoming Prime Minister, Bidzina Ivanishvili, also owns several media outlets that might benefit from the tax amnesty,” the TI statement reads.

According to TI Georgia, the outgoing and the incoming government have to ensure that all policies affecting the media are implemented with a degree of transparency in order to ensure there is no undue political interference in this sensitive sector. “The media sector should be governed by fair and transparent rules rather than [politically-motivated] backroom deals, which too often have decided the ownership, as well as the success of television stations in this country,” TI stated.