How will effect tax code changes on business
\"The Association of Young Financiers and Businessmen” states a position concerning pending changes in tax code, for which a briefing was held on 18th of August at \"Reportiori” Press-club. The organization considers, that the changes that Ministry of Finance presented several days ago, is a step forward in direction of improvement of tax environment and creation of more favorable terms for doing business.
Tax code has always been an object of critics for experts and specialists, for its double meaning and incomprehensible articles concerning business. It is welcome; that government is working on development of the codex and introduces a new set of changes, which, fore mostly, is favored by the business. As you already know, additional changes were taken in summer 2013, which included the restriction of certain defined norms from the Minister of Finance, the activation of non-taxable minimum, the introduction of the Treasury code, reduction of the limitation period from 6 to 3 years etc. Stated changes were favored by experts and business sector.
\"AFBA” welcomes the fact that the codex is being developed while actively communicating with business sector and as businessmen themselves say, most of the proposed sentences are taken into consideration, which business is offering to the state. Without consideration of business interest, it is hard to create an effective codex, thus, involvement of business sector in development of the codex is, certainly, a positive fact.
The new set of changes is the consequence of
this co-operation. Stated changes include:
- The release from VAT of the services provided for internal processing of goods
- Simplification of tax obligations for tourism companies.
- Nullification of the fines issued before 1stof January, 2013, resulted from violation of cash machine usage rules and prolongation of debt under 5000 GEL for a year without additional fine for the small businesses.
- Nullification of the unpaid tax debt originated before 1st of January 2005 (if there has been no activity since that period) and extermination of penalty on tax debt taken before 1stof January, 2009. (provided the recognized tax will be paid)
\"AFBA” considers, that stated changes will improve business environment and create stimuli for development of business. For example, if an investor is building a hotel, later sells the rooms and takes back with leasing rights, he will be freed from VAT during selling, which means that the whole income from the transaction goes to the company and he has more profit and stimulus, to implement similar projects and develop touristic potential.
Therefore, it can be said that 2 years log co-operation of government and business sector to develop the tax code is effective and successful and the maintenance and strengthening of this tendency will surely result in a codex, which will bring the risk of business development to the minimum and escalate the business functioning to the maximum.