Outgoing Govt Wants to Partially Write Off TV Stations’ Tax Debts

Twenty seven months after writing off total of GEL 36 million in tax debts from television stations, the outgoing government has offered partial tax amnesty for broadcasters.  
But unlike the previous tax amnesty in July, 2010, this time the intention is to write off part and not all unpaid debts, according to the Ministry of Finance.
Like in 2010, this time too, if implemented, the largest nationwide broadcasters, Rustavi 2 and Imedi television stations are expected to benefit most from the planned tax amnesty.

In July, 2012 a list of enterprises with tax debts was posted on the website of Revenue Service, which also included several television stations; although the list was removed few days later, data on television stations’ debts were circulated via multiple media sources at the time.

According to those data, Imedi TV in July had GEL 13.9 million in tax debt; Rustavi 2 TV – GEL 5.49 million and the Georgian Public Broadcasters – GEL 3.53 million.

The Finance Ministry declined on October 15 to release detailed information about total amount of debt the television stations currently owe; it also refused to provide list of television stations which owe in unpaid taxes, as well as breakdown of debts per broadcaster.

While announcing about the initiative on October 15, acting Finance Minister, Alexander Khetaguri, cited “putting of all the television stations in equal tax conditions”, helping broadcasters in having “stable financial situation” and fostering competition on TV market as the reasons behind the outgoing government’s decision. He called on the broadcasters to file application to the Finance Ministry to launch procedures required for reducing their tax debts.

The same reason to help broadcasters to further develop was cited during the previous tax amnesty; but the opponents argued that the decision was putting television stations in unequal conditions in terms of competition, because mainly large nationwide broadcasters were benefiting from it in detriment of those television stations which had no tax debts, like Maestro TV and Kavkasia TV.

Opponents also argued that such decisions were demonstrating that the government was treating television stations unequally by turning a blind eye to its friendly broadcasters’ failure to pay taxes.

This trend may continue with this new initiative of the Finance Ministry, Tbilisi-based watchdog group, Transparency International Georgia, said on October 15.

“Tax amnesty rewards those companies which do not pay their taxes and creates an unfair competition environment 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,” it said.

This post is also available in: ქართული (Georgian) Русский (Russian)


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