GEL 36 mln Tax Amnesty for TV Stations

A legislative initiative by the government submitted to the Parliament envisages tax amnesty for all those television stations throughout the country, which currently owe in unpaid taxes.

In an explanatory note, attached to the draft of amendment to the tax code, the government says that total sum of unpaid taxes, plus fines imposed for a failure to pay taxes by the television stations amounts to “about GEL 36 million” (about USD 20.6 million).

The document, however, does not give a breakdown of amount of unpaid taxes per individual television stations, neither gives a number of those broadcasters, which owe the state.

The explanatory note says that according to article 122 of the tax code such information is a commercial secret of a company. There are total of 36 television stations, including eight based in the capital Tbilisi (including the public broadcaster, which operates three TV channels).

It is believed that television stations with nationwide broadcasting, including Rustavi 2 and Imedi, owe the largest share of this GEL 36 million.

Although at least one regional television stations also owes large amount in unpaid taxes. Tamar Gvinianidze, head of the Rioni TV, which is based in Georgia’s second largest city of Kutaisi, told Civil.Ge that the station is now in court dispute with the tax service over up to GEL 1 million in unpaid taxes and fines.

According to the Gori-based Trialeti TV currently it owes GEL 45,000.

In October, 2009 the Finance Ministry agreed to restructure GEL 277,500 debt of Batumi-based 25 Channel – the debt, which the television station was refusing to recognize.

Tbilisi-based Kavkasia and Maestro TV stations said they owe no debt in unpaid taxes.

President Saakashvili in his annual state of the nation address in the Parliament in February offered tax amnesty only for regional TV stations. However, in a text of the address itself, which was posted on his website after the speech, the initiative covers all the television stations, including Tbilisi-based ones.

“All Georgian TV channels, whether regional or national, will be granted a tax amnesty so that they are able to develop stronger foundations. The Georgian democratic and political culture will be enhanced by their development,” the text of the presidential address reads.

Christian-Democratic Movement, a leading party in the parliamentary minority, has also submitted a legislative initiative on the same matter, but it envisages tax amnesty only for the regional television stations, not covering the Tbilisi-based broadcasters.