New tax amnesty for TV stations

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Alexandre Khetaguri, the acting Minister of Finance (United National Movement), on October 15 announced that there will be a new tax amnesty for Georgian broadcasters.

Major beneficiaries are likely to be the two national private TV channels. According to documents which became temporarily accessible on the website of the Revenue Service in July, Imedi TV owed some GEL 13.9 million and Rustavi 2 GEL 5.5 million in taxes. It is unclear if and to what extend other TV companies have tax debts today.

In June July 2010, Parliament passed a tax amnesty for all Georgian TV stations, erasing GEL 36 million in unpaid debt of the books of TV outlets. No information about the companies benefiting from the amnesty were released but the step was widely believed to benefit mainly Rustavi 2 and Imedi.

At the time, TI Georgia argued that a tax amnesty rewards those companies which do not pay their taxes and creates an unfair competition environment because many TV companies pay all their taxes, while those TV channels that enjoy political backing continue to get away with not paying them. This risk continues to exist. Rustavi 2, Imedi and several other TV channels are owned by individuals close to the United National Movement party and recent reshuffles in media ownership indicate that the television sector will continue to be politically polarized. The family of the incoming Prime Minister, Bidzina Ivanishvili, also owns several media outlets that might benefit from the tax amnesty.

Several previous owners of television stations have recently stated that they were coerced into giving up ownership their stations by the outgoing government, asking for media assets, including Rustavi 2 and Mze, to be returned to them.

The outgoing and the incoming government have to ensure that all policies affecting the media are implemented with a degree of transparency, in order to ensure there is no undue political interference in this sensitive sector. The media sector should be governed by fair and transparent rules rather than political backroom deals, which too often have decided over the ownership as well as the success of television stations in this country.