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Ministry of Finance of Georgia cancels “Golden List”

By Nika Gamtsemlidze
Friday, June 7
According to the order of the Minister of Finance of Georgia, Ivane Machavariani, the “Golden List” of companies has been canceled.

Companies that were part of the Golden List could use simplified procedures while importing goods into the territory of Georgia. In particular, for the companies of the Golden List, the duration of paying the taxes for imported goods was 30 days. According to the changes, all companies will benefit from the same taxation and payments, and the duration will be 5 days for everyone.

While the Ministry of Finance explains this decision by trying to create a competitive environment for businesses and putting them in equal terms, representatives of private sector say that they had “no information about these changes.”

The Chairman of the Sector Economy and Economic Policy Committee, Roman Kakulia believes that there should not be a Golden List in general, but the problem that he has is in the reasoning and lack of proper communication. “I agree that there should not be a Golden List, but the process of adaptation [to the changes] is important for everyone,” said Kakulia.

As the Director of Legal and External Affairs of the British American Tobacco, Zviad Skhvitaridze said, “this is absolutely shocking for our business and it puts us in a crisis.”

The representatives of the Tax Payers Union (TPU) also talked about this matter, as they said, this was “very unexpected for the private sector.”

“It is unclear, on the one hand, what influenced this decision, and on the other hand, why it was made in such a rush. Such changes must not be entered in force this fast and business should be given a reasonable time for adaptation,” reads the statement released by TPU.

Business Association of Georgia (BAG) speaks about the potential financial problems for companies, as they say, “we hope to get direct dialogue and consultation with business in order to review this decision.”

“Over the last years, in the light of the continuous improvement of tax environment and tax administration, we think this decision is a uniquely exceptional and is a step backward,” reads the statement released by the BAG.

Business Ombudsman of Georgia, Irakli Lekvinadze also addressed the decision, saying “this is the failure of the Ministry of Finance in communication with the business.”

“Because of such unexpected and unsettled decisions with business, subjects involved in entrepreneurial activity in Georgia do not have the opportunity of stable development and long-term forecasts, which affects these companies,” reads the statement of the Business Ombudsman.

As the Deputy Minister of Finance, Tsotne Kavlashvili said, the decision is related to the responsibilities assumed within the Association Agreement with EU.

“We have an obligation for our customs procedures and regulations to be harmonized with the EU customs legislation. This decision is another step forward in this direction,” said Kavlashvili.

According to Ivane Machavariani, the order for excisable goods will enter into force on June 12 and in other cases, on July 2. As the representatives of the Ministry of Finance say, they have sent notices to the business about the amendments and the private sector was given a reasonable time for adaptation.