Tax, Financial Amnesty Approved

On December 24 the Georgian Parliament approved a draft law on tax and financial amnesty, envisaging amnesty for those persons who evaded paying taxes before January 1, 2004, as well as legalization of undeclared property and finances.

But the amnesty will not apply to a broad-range of state officials.

“The state will pardon the nonpayment of total about 2 billion Lari,” MP Roman Gotsiridze, Chairman of the Parliamentary Committee for Budget and Finances, said on December 24.

According to the law all criminal charges will be dropped against those persons who are currently undergoing trial for tax evasion committed before January 1, 2004.

The document obliges people to declare all property before the end of 2005.  Declared property will be legalized only after the owner pays 1% of its cost to the state budget.  The state guarantees the confidentiality of the process.

The document also gives a list of those persons to whom amnesty will not apply. The list includes officials, individuals suspected in terrorism, arms trade, drug trade and trafficking.

The initial draft provided blanket amnesty to all, including officials.  A radical faction of the National Movement, led by the MP Giga Bokeria, however, protested against what they termed “financial amnesia” and demanded that top government officials remain fully responsible for possible abuses while in office.

As a result, many officials will not be given tax amnesty (all included officials are listed below.)

Those MPs who supported inclusion of officials on the list of those not offered amnesty claim that offering amnesty to officials would contradict the anti-corruption law which was passed by the Parliament in February.  That particular law envisages the confiscation of the assets of those officials and ex-officials who fail to prove their assets were acquired legally.

However, the law adopted by the Parliament on December 24 includes a provision, according to which the anti-corruption law will not apply to those officials who re-invest their riches in the country’s economy.

“It is a very important law, at least from the sociological point of view, as the businessmen should not be afraid.  Now the way this law will be implemented is of utmost importance,” Parliamentary Chairperson Nino Burjanadze said on December 24.

List of Officials Not Offered Tax Amnesty

*The President
*Members of Parliament 
*Ministers and their deputies,
*Chief of the State Chancellery and his deputy,
*All heads of state departments and their deputies.
*Top officials from the customs department
*Top officials from the tax departments
*Chairman and the deputies of the Chamber of Control
*Governors and their deputies
*All heads of city councils
*The President and members of the Council of the National Bank of Georgia
*Members of the National Security Council
*Members of the Justice Council
*Members of the National Regulatory Commission
*Chairman of the CEC Chairman and his/her deputy and secretary
*All Judges
*Prosecutor-General and his/her deputies
*Top officials in the Prosecutor’s Office
*All directors of state-run enterprises