Ministry of Finance of Georgia warns broadcasters on their debt

The Ministry of Finance of Georgia warns the television channels that have accumulated current debt before the state budget and gives one day to pay the current debt accumulated from October 1, 2019.

Minister of Finance, Ivane Machavariani, on August 14, 2019, publicly addressed TV broadcasters about the tax debts accumulated over the years, proposals for debt restructuring and also to start paying off current debts.

The agreement between the Revenue Service and the Ministry of Finance about debt restructuration is still in the process, but television companies have not started paying off existing tax debts, says the ministry.

“The Revenue Service is obliged to implement the measures defined by the Tax Code of Georgia (in case of avoiding paying tax debts),” reads the statement.

The tax authority is not obliged to give public notice to the taxpayer of the measures provided by the Tax Code and this statement of the Ministry of Finance is in the interests of the TV broadcasters.

At the same time, such a concession to media outlets creates a non-competitive environment and is unfair to those who pay taxes.

“The state has an obligation to protect the interests of all taxpayers, but also to effectively manage public finances, which means that taxpayers' money must be spent on each citizen's state social and other important obligations,” the ministry announced.

According to the Georgian Dream MP Irakli Kobakhidze, a different approach to the state-owned debt TV channels is inadmissible.

As he told reporters, if anyone pays the accumulated debt, everyone should pay together.

“I don't know how the claim to pay taxes can be assessed as pressure. The approach will be equal for each channel,” said Kobakhidze.

“TV companies have the right to declare a tax boycott because of their unequal situation," Roman Gotsiridze, chairman of the parliamentary faction of the United National Movement, wrote on Facebook.

“As long as the government's speaker Imedi TV does not pay off its budget debt for years, all TV companies have the right to refuse to pay taxes. Imedi Holding has accumulated tens of millions of GEL in budget debt with the permission of the authorities. It is a crime and all the finance ministers and other people with whom this unjust decision has been agreed will be punished by the law,” wrote Gotsiridze.

He added that TV companies have the right to declare a tax boycott and give international resonance for politically motivated and biased actions of the government due to violations of competition law and unbalanced media structures.

TV Kavkasia addressed the Minister of Finance regarding the statement of December 23, calling the government’s attitude 'shocking'. The channel referred to the use of a selective approach towards the same business representatives. The letter recalls, that TV Kavkasia has been paying taxes, while, like other broadcasters, it could’ve used the money for development.

According to the announcement, after publicizing and realizing the scale of the injustice, “our broadcaster essentially refused to pay taxes since late August in protest,” until the government's decision the channel with huge debts is clear.

To eliminate the unfair approach, TV Kavkasia also included their demands in the letter.

1. To publicize the stage of discussing the multimillion-dollar debt of Imedi, Rustavi 2, Maestro, what they offer the state and what the state offers them.

2. We demand that the rest of the companies are put in equal conditions; not only to the existing debt must be given the same schedule, but also the paid taxes proportional to debts of these channels (concerning income and debt accumulation period of each one of them) should be returned to us, and we must be allowed to pay this money in accordance to the schedule of companies, paying old debts.

3. If Imedi TV, Rustavi 2 and Maestro immediately repay their budget debt - GEL 55 million, we promise to pay off our current debt on the same day, which looks ridiculous compared to these colossal amounts.

TV Pirveli says that the company has addressed the ministry of finances on December 16 to reschedule the debt for several weeks until mid-January, calling it outrageous that seven workdays before the end of the year, they are told to pay off the current deb.

Rustavi 2 and Imedi (also Maestro and GDS) have already said they have no current debt and have been paying taxes since October. According to the Ministry of Finance, TV companies Imedi, Maestro and Rustavi 2 will owe more than $ 55 million in debt to companies by the end of the year. However, the minister’s announcement was regarding the debt, accumulated since October 1st.

Formula TV director Zuka Gumbaridze says Formula One has no tax debt.

As for the evaluation, Gumbaridze says that the Ministry of Finance should be as constructive as possible with business, especially to television.

“We pay everything penny by penny,” Nika Gvaramia, the chief executive of Mtavari TV station, responded to the statement released by the Ministry of Finance.