President Saakashvili acknowledged on December 3 that the state still had “lots of shortcomings” in the relations with businesses, which, he said, would be addressed through “new economic course” aimed at boosting small and medium businesses.
“Although during recent years Georgia demonstrated an impressive progress in all kinds of ratings and in respect of its reputation in terms of improving business climate and combating corruption, a lot of shortcomings are still remaining in the relations between the state and the entrepreneurs; a lot of entrepreneurs … still have a feeling that they are not properly listened and are treated unfairly by the state; cases are still frequent, when the punishment is more severe than the violation deserves it,” Saakashvili said in live televised remarks at an opening of new customs clearing facility in outskirts of Tbilisi.
“The entrepreneurs often fairly have a perception that the state does not do enough to make business environment better. That is why a lot of business people have lost the sense of stability... Hence, they do not re-invest in expanding their businesses; they do not create new jobs and many people, who could have launched business, do not do it, because, in their perception this is connected with humiliation,” he said.
Saakashvili’s remarks follow an address to the President by parliamentary minority leader, MP Giorgi Targamadze, who called on Saakashvili to stop “aggression” against small and medium businesses, which “are struggling for survival”, trying “to get rid of claws” of tax authorities.
In the same remarks, Saakashvili also said on December 3, that “we should awaken entrepreneurial spirit through fair economic environment”, which, he said, would help creation of “lots of small and medium businesses.”
“Today we announce a new economic course, which aims at overcoming the existing shortcomings and creating much better business environment in Georgia,” he said.
As part of this “new economic course”, President Saakashvili enlisted some of those measures, which are provisions of the new tax code, which will go into force from January, 2011.
According to the new tax code, a position of tax ombudsman will be created. PM will appoint ombudsman in agreement with Chairperson of the Parliament. Ombudsman will have to present an annual report on taxpayers’ rights to the parliamentary committee for finances and budget. The new tax code, which was not supported by the parliamentary minority saying that it failed to properly address entrepreneurs’ needs, also envisages principle of "good faith", wherein if proved that taxpayer acted in good faith and a wrongdoing is caused by an unintentional mistake rather than by intended attempt to evade taxes, a taxpayer will not be fined by the Finance Ministry’s council for adjudication of tax disputes.
Saakashvili also said that new customs clearance facilities with one-stop services would significantly reduce timeframe and cost of such procedures.