Businesspeople Condemn Cancellation of Tax Arbitration

The Georgian Federation of Businessmen, an influential business lobby group, adopted a statement on April 21 saying that the cancellation of Tax Arbitration Councils ?can not be regarded as a step towards strengthening the partnership between the government and business.?

The Parliament approved amendments to the Tax Code, with its first hearing on April 20, envisaging cancellation of the Tax Arbitration Councils, which are in charge of dealing with disputes between the tax-payers and the Finance Ministry.

These councils, which were set up for each individual case to solve the disputes between the tax-payers and the authorities, were seen by the business community as one of the most successful components of the new Tax Code, which was approved last December.

?Today, when practice has shown those flows in the new Tax Code, which triggered an increase in smuggling and a reduction of budgetary revenues, as well as put the necessity of reconsideration these [articles of the Tax Code] on the agenda, amendments to the Tax Code which envisage the cancellation of independent arbitration is a step back in resgards to the establishment of economic stability and attraction of investments,? reads a statement released by the Georgian Federation of Businessmen, which was signed by representatives of Georgian big business community and economic experts.

Businesspeople also say that in a system wherein the county’s judiciary system under the influence of the governmente, the activities of the independent Tax Arbitration Councils are of vital importance for business.

The government decided to cancel Tax Arbitration Councils after the Finance Ministry lost a number of cases that resulted in the government re-paying several million Lari to a number of private firms.

?Currently there are several cases under consideration by the Arbitration Councils. The cases involve disputes over tens of millions of Lari. We should immediately take measures [against these councils], as we can not afford to re-pay tens of millions of Lari because of the unfair rulings of these councils,? Prime Minister Zurab Nogaideli told reporters on April 20.

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