The FINANCIAL — At the beginning of the New Year, last Thursday, CEOs of various organizations in the country received a letter, a statement from Mr. Mikheil Saakashvili, President of Georgia.
The FINANCIAL — At the beginning of the New Year, last Thursday, CEOs of various organizations in the country received a letter, a statement from Mr. Mikheil Saakashvili, President of Georgia. The statement gave a brief definition for entrepreneurs about the economic situation and the Government’s main priorities for 2011.
“With your support the country has managed to overcome the most acute crisis period, together we managed to sustain a reformative course, for which the World Bank named Georgia the first reformer in the world,” the statement read.
“In recent years we have had a huge advance in business environment improvement and in fighting with corruption. However, there are still some gaps left in the relationship between government and entrepreneurs,
“Still many entrepreneurs have the feeling that they are not being heard and paid attention to by the Government. There are still many cases when punishment is bigger than existing abolishment requires. Entrepreneurs legally have the feeling that the Government does not do enough to create an even better business environment,” read the President’s statement.
“You – the working force of Georgia – present the backbone of the country’s economy. The future of Georgia lies on your shoulders. Your success means the country’s development, creation of new working places, and accumulation of national wealth.
Our common mission is to create an even better business environment, the improvement of existing gaps between government and business. For this the Government of Georgia and I have announced the launch of a New Economic Course.
As a result of the New Economic Course, the Government from 2011 is offering a tax system based on fair, easy and trustful relations that will create a better business environment and ensure each entrepreneur feels more protected,” Saakashvili stated.
“The New Course considers many novelties, and was collaborated together with you and your colleagues, considering your remarks. By its implementation your work will be more successful and comfortable.
Next year we expect 6% economic growth. For this we need to actively continue seeking news and implementation of different innovations.
We wish that the year 2011 be more successful for you and for the country, and your business develops legally and in a competitive environment,” said the statement.
The new Tax Code of Georgia, which was officially adopted on January 1, 2010, includes several newly proved regulations.
For small businesses the introduction of easier tax regulation – proved tax privileges – 3% or 5% of turnover, the payer is authorized to conduct easier accounting.
Tax ombudsman – one of the institutions for presenting and defending the rights and interests of the payer, as well as restoration of abolished rights.
The principle – Good Faith – if the action of taxpayer is caused by mistake/lack of knowledge and was not set out in a mission of tax payment avoidance, the taxpayer might be free of paying sanction.
Honest payer – The Revenue House creates motivation to honest payers and provides additional services/privileges, such as Gold List.
In advance decision – the payer is given the right to in advance make an agreement of Game Rules and terms of taxation with The Revenue House.
Private Tax Agent – the agent defends the rights of payer in The Revenue House, provides consultation and supports in performing tax liabilities.
Warning instead of fine – if not using the cashbox, instead of a monetary fine for the payer a warning might be used.
The special regime for taxing by VAT – the payer which for the profit of budget has paid 200,000 GEL as VAT, while importing is free from liability of paying VAT, which from the government side is equal to making an investment in the private sector.
Quarterly declaration of taxes – the taxation period of operations instead of one month stage by stage will be transferred to quarterly, which from the government side is equal to making an investment in the private sector.
Demand for tax checking – the payer is given the right to demand from The Revenue House to conduct tax checking at his convenient time, which guarantees partner relationships between the Government and private sector.
Consolidation of legislation – the tax and custom codes were unified and formed as one, moreover, became free from ambiguous and difficult regulations. More than 100 paragraphs were reviewed and formed as 5 legal acts.
For the better convenience of clients multilateral electronic services were implemented and activated.
All electronic services will be working at full capacity from 1 May, 2011, the majority of them are already partly or fully launched. From 1 June, 2011, renewal of the main structures of the tax system will be finished. This includes:
www.rs.ge – the web portal of The Revenue House, which saves time, energy, financial and labour expenses for the payer.
Electronic declaration – Guarantees a simple, comfortable and cost-free payment system for the payer.
New cashboxes – the purchase of cashboxes with a GPRS system and given to the payer, which will reduce the necessity of checking.
Moreover, this also includes electronic invoices, electronic tests, electronic administrative systems, parcels sent by the post, Tracker7 and integrated tariffs.
At the final stage is the creation of that necessary for better service infrastructure. In January 2011 there was completed the building of economic zones, which will totally solve problems in custom houses.
One of the priorities of the Government is justifiable administration, so that the businessman does not see risk in investment and tax structures to be his partners.
Easier passport control – at the checking point, physical individuals can pass passport control without having to come out of their car.
Easier export procedures – in the customer warehouse the cancellation of goods presentation liability, and the goods as load-custom declaration, as well as the opportunity to present the goods with invoice. The physical individual has the right to make goods declaration of an amount less than 15,000 GEL orally as well as in written format.
Introduction of joint management of the border together with neighbour countries (Turkey) – the implementation of faster and easier custom processes of import-export operations.
Publicity, transparency, public awareness of society and business are the main priorities of the Government for better functioning of the tax system. The Government sets several constant processes, such as the publicity of outcomes of sector checking, public decisions, deepening the relationships between business associations, service 077, the training of payers, the video version of tax code definitions, and issue of easier version of tax code for informing investors.
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