Weekly Review of the Parliamentary Committees’ Sessions. July 16-23,2001

Committee of Self-Governance and Regional Policy

On July 17th, the Committee held a meeting with the representatives of the NGOs, who have been engaged in local self-governance reforms. The meeting has been unsuccessful because the non governmental organizations once again gave a negative assessment to the bill on “Local Self-Governance and Governance”, elaborated by the State Chancellery (President’s office).

Tengiz Shergilashvili of the “Young Economists” stated, that the Government only pays tribute to the idea of self-governance with this bill, but keeps the present governance system unchanged. This bill became an object of political bargains and this has been seen in the process of the consultations between the Government and the Opposition.

“Self-Governance must not become an object of narrow bargains” – said Shergilashvili. Adoption of this bill will cause a deepened governance crisis in the country, believes Shergilashvili.

Koba Arabuli, member of a technical team at the “Urban Institute” stated, that the Government did not accept suggestions of the NGOs.

“Therefore, it does not matter what NGOs think” – said Tinatin Khidasheli, President of the Association of Young Lawyers – “It is impossible for us to write corrections to the paragraphs of tis bill when we can not accept the principle of the bill”.

“The previous Parliament dishonored itself with adoption of the present law on Self-Governance and Governance. You are doing the same mistake. The bill submitted to the Parliament separates us from self-governance. If you adopt the bill, we would sound an alarm at the international organizations,” stated Nugzar Ivanidze, leader of a non-governmental organization “International Society for Fair Elections and Democracy”.

Committee of Incomes and Taxes

At the working meeting of July 20, the Committee discussed the incomes to the budget from tobacco business for the last 6 months. Issue of local tobacco industry has been emphasized as well. Since January 1 2001, local tobacco products started to enjoy privileges in taxation compared to the imported tobacco products. The IMF has repeatedly criticized this decision of the Government.

Tobacco producers and the representatives of the Customs Department and the Special Legion have been invited to the meeting.

“We did everything to let you work in accordance with the law. Today we keep fighting the smuggling and need to keep the existing taxation system for this purpose. If the Government follows the recommendations of the MF and raises taxes, we would not have excise-mark tobacco” stated Avtandil Tsereteli, Director General of “Georgian Tobacco Products” company. Tsereteli thinks, that main routes of illegal tobacco import are Abkhazia and Tskhinvali (South Osetia). The central government does not have a control on these breakaway territories.

In his conclusion speech, the chairman of the Committee supported continuation of privileged taxation regime on local tobacco products. According to his information, the central budget should earn 62,5 million laris from tobacco business in the year 2001. As for first 6 months of the year, there were earnings worth of only 14,4 million laris. However, as Vitali Khazaradze, chairman of the Committee stated, there were tendencies of growth of these figures in May and June thanks to the privileged taxation regime.

Under the Taxation Code of Georgia, since January 1st, 2001 tax for one box of non-filter and filter cigarettes are 0,07 and 0,20 laris respectively.