Although not perfect, the tax and customs system has improved recently and cases of businesses being unfairly targeted have reduced, President Saakashvili said.
“For some time we’ve been too carried away with those ratings, boasting by Georgia being the number one reformer in the world and with lowest level of corruption – that’s true, but one thing is what’s on the paper and another is what was really happening in 2009, 2010, in post-war years; I’ve been hearing lots of justified concerns and complaints” about “unfair fines” imposed on taxpayers, Saakashvili said in an interview with Imedi TV recorded last week and aired on September 24.
He said that situation had improved since then thanks to the government’s “new economic course”, involving new tax code, appointment of tax ombudsman and number of other initiatives like alternative tax audit and new customs clearance facilities with new approach of providing business-friendly services rather than deliberately looking for pretexts for fining taxpayers.
Although not ruling out that he “may be wrong” in his assumption that the situation had improved, he also said that he believed that was the case based on multiple sources, as he regularly talks on this issue with lots of stakeholders.
An October, 2009 confidential U.S. embassy cable, leaked by WikiLeaks, reports about “increasingly draconian measures” by the Georgian customs and revenue services to fill dwindling government coffers. The same cable was also reporting about allegations that “individuals with ties to influential government officials can monopolize commodities and therefore control prices while skimming profits off the top” – the allegation still frequently leveled against the authorities.
President Saakashvili first acknowledged publicly the problem of, as he put it, “shortcomings” in the relations between the state and the entrepreneurs, in December, 2010, when announcing about “the new economic course.” In March, 2011 when the leadership of the Finance Ministry’s Revenue Service was reshuffled, Saakashvili linked the move with the governments “new approach” to have “maximally fair” treatment of taxpayers.