Controversy Deepens over Abolishing of Tax Arbitration

President Saakashvili welcomed on April 21 the Parliament?s decision to endorse the governmental proposal to abolish the Tax Arbitration Councils, saying that the current arbitration system was in favor of business only and not government.

He said that the businessmen use this system, which was set up to deal with tax disputes between the tax-payers and the authorities, to avoid paying taxes.

?Some think that there is no need to pay taxes. This [creation of Tax Arbitration Councils] was the government?s mistake and now the government must improve this? We should create a correct system and fair conditions wherein neither the government, nor business will have advantages,? President Saakashvili told reporters on April 21.

But he did not clarify whether the government intends to propose a new version of tax arbitration.

Parliamentary Chairperson Nino Burjanadze said that the Parliament will request that the government propose a new system of arbitration to the legislators, which will be acceptable for both businesses and the government. ?In the current system the government is in a losing position. But we need a system in which both the government and businesses will be in an equal position,? Nino Burjanadze told reporters on April 21.

But Prime Minister Zurab Nogaideli seems to be taking an uncompromising stance regarding this issue. He said that the complaints voiced by the Georgian Federation of Businessmen ?are absurd,? adding that the Tax Arbitration Councils will be abolished.

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.?

?An unprecedented thing happened yesterday. The government unilaterally violated the agreement between the authorities and the business and abolished the arbitration system. Yesterday I met with the Prime Minister. We discussed some investment projects? But not a single word was said by the Prime Minister about the government?s intention to abolish these councils,? Badri Patarkatsishvili, the President of Georgian Federation of Businessmen and an influential financial tycoon, said on April 21.

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