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Prime Minister of Georgia Updating the Businessmen on the Novelties in Taxation

13 Apr '11

On April 13, the Business Association of Georgia hosted the Prime Minister of Georgia, the Head of the Revenue Service of the Ministry of Finance of Georgia and Business Ombudsman at Sheraton Metekhi Palace Hotel. The meeting aimed at updating the businessmen on the novelties introduced in the taxation. Pursuant to the new initiative of the Revenue Service, a company is now allowed to make a choice between a tax inspector or auditor. The audit carried out by an auditor will cost certain amount of money for the business. At the same time, if violations are detected in the course of the audit conducted by auditing companies, the business will be partly exempted from fines.
"We have intensively worked with private sector and identified the concerns of the business. I believe that we're offering business an effective option for problem solution. Ever since announcing the "New economic course", we have been offering several new initiatives to private sector. We're determined to solve any problem that business encounters with the Revenue Service. Clearly this problem can not be solved over the night and needs some time. According to the new initiative, a private company may address other auditing or consulting companies, holding appropriate license, with the request to audit it. However, this auditing company should obtain a special permission by the Revenue Service to implement appropriate actions. Phrases like - we have been visited and sealed by the tax authority, they create problems to us and cause decrease in our sales, will be fully eliminated. The audit report produced by the auditing company will be equally deemed as the audit report produced by the tax authority. At the first stage, this project will be tested in a pilot mode for the next 3-6 months. However, later all auditing companies will be allowed to conduct tax audits. The market itself will settle the fees for rendering the audit. When several auditing and consulting companies operate on the market, the tariffs for service rendered by them will be regulated by the market itself, since they will heavily compete between each other. The Government does not set the price", - said the Prime Minister of Georgia.
According to the President of the Business Association, Mr. George Chirakadze, "The initiatives coming from the Government are very important for the business in terms of involvement of private auditing companies in the tax audit. Businessmen are not very happy with having relations with tax inspectors and in such a case the business is given the opportunity to hire private auditing companies. Audit conducted by them will be acknowledged by the Revenue Service. The distrust that prevailed between the tax authority and business will be minimized and business will be entitled to address auditing companies".
According to the Ministry of Finance, the Revenue Service is offering business a novelty in the area of tax audit. This novelty is the involvement of independent auditing companies in this process, being one of the important steps towards encouraging the cooperation and trust between the government and private sector. From now on, wherever a tax-related risk occurs, taxpayer will be notified of the tax audit and he will have the right to decide who to ask to conduct his company's audit, whether the Revenue Service or independent auditing or consulting company. In addition, if a taxpayer is served by an independent auditor, the period audited will be equally deemed by the Revenue Service as the audited period. If a taxpayer goes for a private auditing or consulting company, he will be partly released from fines if violations are detected in the course of audit. Independent auditing companies will work with taxpayers for one year by applying their methodology and audit procedures. Meanwhile the standing committee to be staffed by the representatives of the Revenue Service, auditing companies and invited experts, will develop audit methodologies manual.