Amnesty law time trouble

Lali Chagelishvili

Financial amnesty term will expire at the end of December of 2005. If there is someone who didn’t legalize the property he can do it in the time remained.

On December 24, 2004 Georgian Parliament adopted the law on non-declared tax liability of amnesty and property legalization. Right after the adoption of the law it was much discussed. In spite of different conceptions no one was against the law meaning that all unanimously declared the adoption of the law that would enhance the relationship between business and public and this is a good initiative from the state to support business. The purpose of the law on financial amnesty is to release persons from criminal liability on committed crimes in industrial and economic sphere.
The article # 1, item # 2 determines dissemination of the law namely a) the following sub item the law shall not extend to the persons owning property by means of drug and weapon smuggling, terrorism, trafficking and other transnational crime. Public officials following the present item b) sub item “Conflict of interests and corruption in public sector” Georgian law article # 2 including National Security Council and Judicial Supreme Council members (but not members of other counseling bodies of the president and persons equaled by status to the officials mentioned in Georgian law article # 2 on “Conflict of interests and corruption” also heads and deputies of judicial unit of public sector determined by Georgian criminal law process code article paragraph 47, persons having the right of administration and representation of the organization from October 17, 1997 the property of which wouldn’t increase 1 million GEL and in which state directly or indirectly posses (possessed) share of 50% or more than 50 % and close relatives, family members and other related persons determined by the same article part 21, 21-1 and 21-2. Paragraph # 4 notifies that amnesty determined by the present law is spread on the mentioned officials and their close relatives and persons only before getting the status of a public official.
Article 4. Ruling the legalization of non declared tax liability
Right after the law comes into effect tax and customs liabilities by residents and non-resident population, also citizens and organizations before January 1, 2004 shall be considered fulfilled and shall not be the subject of criminal issue or other types of law procession following the legislation.
The article is extended to tax payers in accordance with Georgian tax code and other legislative acts, also tax agent counselings that didn’t meet the term of tax liability declaration and payment.
This article is not extended to A) tax and customs liability of relevant public bodies stated by the legislation which were declared and accounted but not paid. B) More tax entry depicted in the budget for non-trade operations and non-factual dealing. The money shall be considered annulled.
We’ll remind the rule of declaration-legalization of hidden property to persons who didn’t legalize it yet. The legalization of a person’s property is performed following the rule by the present article. – 1% market price of hidden property profit tax shall be paid. The law enables to legalize finances within the terms indicated in the law by placing money in Georgian banks without paying 1%. 1 % payment is spread on declared finances and not on estate property having no economic purpose after the law becomes effective till the end of 2005 (or in one year period after law becomes effective -2004.24.12)
Following the law, money entry shall be done in resident banks of Georgia with national or foreign currency in cash or by means of transferring one’s own money from other countries, within the 3 months’ period stated by Georgian parliament.
Data in the declaration contains confidential information and it must meet the requirements of Georgian Tax Code on confidentiality of the information of taxpayers. After the tax organization receives the declaration and the receipt of 1 % payment, the person is given confirmed copies of documents also relevant form certifying legalization of a person’s declared property including hidden property (profit).
We’ll remind that according to the law on amnesty estate property owned in 1992-2004 and registered before 1992, the market price of which doesn’t exceed 300 000 GEL, is legalized without one entry payment, also finances put in Georgian banks between the period mentioned above.
Any liabilities related to property legalization (following Georgian legislation on tax, customs and traffic foundation) shall be considered fulfilled by the statement of January 1 of 2004. Control and law enforcement bodies by Georgian legislation are not allowed to arrange revision in any form on the legalized property.
The law makes possible to legalize illegal money, property etc. But who can determine the size of property? Can the honesty of society be trustworthy? Can we believe that their property equals 100 000 GEL and not 1 million? The nearest future will demonstrate that all.
The law also contains vague information on different options having the hidden property owners, without 1 % payment in the bank. But what amount should it be? (Weather it should not exceed 1 %, equal to 1 % or more than that) is not clear in the law. We believe this is one of the reasons why the president of the National Bank has to remind the population of in time legalization of hidden property.
If we provide banks with this vague information it will be hard to maintain –mobilize resources.
To make the above more precise if one wishes to legalize illegal property you can first evaluate it and then make 1 % payments entry to the budget. Hereinafter we mention that property equaling 300 000 GEL is considered legalized . That means if one has 400 000 GEL hidden property 4 000 (1 % of 400 000) is transmitted to the budget.
President of Georgian National Bank – Roman Gotsiridze reminds business representatives and the population that only 10 days are remained to legalize money following the law on “Amnesty and non declared tax liabilities and property legalization”. In May, June deposit has considerably increased in bank channels reaching 47 million, he adds.