181 Companies Become Golden List New Members under Simplified Terms

The Government of Georgia has made a decision to further soften the Golden List membership requirements and let the companies with a 900 000 GEL annualized payments in imports dues to enjoy the Golden List customs preferences.

Giorgi Tskhakaia, the head of the Georgian Finance Ministry Office for Revenues, says the Golden List unites 192 companies and the figure will considerably increase in the near future.

Giorgi Tskhakaia, the Revenues Office Chief: “We set about simplifying regulations for the Golden List membership at the end of 2009. The implemented pilot project has turned out to be a success. We expected, however, more companies would submit membership applications. We have further refined and softened the Golden List membership requirements. We organized several meetings with the business sector representatives to learn their considerations and approaches. Now the companies wishing to be involved in the Golden List will not have to break through a number of additional bureaucratic barriers. No guaranties are required for submission of membership applications, because we deal with genuinely respectable companies, which are engaged in imports activities and their businesses completely fit the Golden List membership conditions”.

Companies with over a 1.5m GEL annual turnover are considered as large-scale businesses. The Revenues Office will name the companies which qualify for the Golden List membership every several months. The Georgian Finance Ministry comes about to provide trainings for the Golden List member companies so as they be able to fill in property declarations.

In his interview to the Georgian Business Week (GBW) newspaper Giorgi Tskhakaia agrees the problem genuinely exists and unveils the reasons for which the Golden List membership criteria have been simplified.

“Companies had to deal with a number of problems, which led us to revision of the criteria. The guarantee the Finance Ministry required from companies was worth certain price. Part of the companies rejected to pay even this fee. The issue of imposition of penalty sanctions was also problematic, because the previous regulations called for imposing fines on companies if the preliminarily declared cargo would occur heavier or lighter by 10 kg”, Giorgi Tskhakaia said.

Georgian experts note that the growth in number of the Golden List member companies is a positive tendency. At the same time, they stress that the Golden List everlasting enlargement will seriously complicate the Finance Ministry administering procedures.

David Narmania, expert: “The Golden List-provided preferences should be accessible to the medium-size business segment too. The larger the Golden List, the more complicated the administering leverages will become. Hence, I believe that the Golden List should not be enlarged endlessly. If the Georgian Finance Ministry invites extremely huge number of companies to the Golden List, the complicated administering burden may lead to retightening the Golden List membership requirements again”, David Narmania says.

Recently, LLC Mobitel has become the Golden List member as an honest taxpayer. The company says the Beeline annual turnover equals 5m GEL and annual payments in imports dues are over 900 000 GEL. The company has been found with no essential procedural lawbreaking in the customs procedures.

“We are pleased the Finance Ministry has conferred the status of the Golden List member to Beeline, besides the status of a dynamically growing company with consumer-oriented services and products. We aim to make our operation as transparent as possible and show honesty in paying taxes to the state budget of Georgia”, Andrey Piatakhin, the Beeline director general, said.

Currently, the Golden List softened regime is accessible to only importer companies. However, the Golden List preferences will be soon granted to the companies, which are engaged in export, re-export and customs warehouse activities.

At the moment, one hundred and ninety two companies enjoy the Golden List customs-trade cooperation program. Namely, LLC Georgia, Wissol Petroleum Georgia, T.B.T Group, LLC Alliance-Georgia, LLC Georgian Distribution-Marketing Company, Sharm Trading and LLC Demas are widely applying the program-provided preferences.

The Georgian Finance Ministry Office of Revenues explains that the program grants significant preferences to importer companies. Namely, the program-participant companies are entitled to fill in electronic declarations in advance without attached documentations, place their consignments in their own storehouses bypassing the customs warehouse and pay the declaration fee within 30 workdays.

According to the simplified conditions, which were enacted in October 2009, the required annualized customs value of declared cargo has been reduced to 5m GEL from 10m GEL, while the annualized payments in imports dues have been halved to 900 000 GEL. The general guarantee fee on excise-free cargo has been reduced to zero from 100 000 EUR, while the guarantee fee on excisable consignments has been lowered to 100 000 EUR from 500 000 EUR.

Previously, the companies pretending for the Golden List membership were requested to keep annual performance records free of customs law infringements. The term has been reduced to six months.

International organizations with the diplomatic status, foreign embassies in Georgia, consulate offices and the Georgia Government’s offices are also encouraged to enjoy the Golden List preferences.