No deal reached between Ministry of Finance, TV stations on unpaid taxes

Today’s meeting between the directors of several Georgian TV stations and Minister of Finance Ivane Matchavariani has ended without a result after December 25th, when the Revenue Service ordered TV stations, including Rustavi 2, TV Pirveli and Kavkasia TV, to pay off the principal of their accumulated taxes starting from October 1, 2019. 

Inga Grigolia, the Director General of 1TV, Nino Jangirashvili, the Director General of Kavkasia TV, and Natia Kuprashvili, the Head of the Association of Regional Broadcasters of Georgia have attended the meeting with Minister of Finance Ivane Matchavariani earlier today.

The Georgian TV stations with unpaid debts are:

• Rustavi2 – 28 million GEL ($9.76 mln/€8.76 mln)
• Imedi – 27 million GEL ($9.41 mln/€8.44 mln)
• 1TV – 100,000 GEL ($34,848/€31,276)
• Kavkasia TV – 24,000 GEL ($8,364/€7,506)

The Finance Ministry says that Georgian TV stations such as Rustavi 2, 1TV, and Kavkasia TV have not paid their taxes despite the warning.

On December 23, 2019 the Ministry of Finance has urged TV stations with current tax debts to the state to pay the principal of the debt accumulated since October 1, 2019 and has given them one day to comply.

Georgian Finance Minister Ivane Matchavariani said that previously, TV stations used to accumulate debt, which was later written off. He said this is a “malicious practice and it is time to change it”. Photo: TV Imedi. 

The Ministry of Finance divided the debt of TV stations into two categories: the old debt, accrued before October 1, 2019, and the principal of current tax debts accumulated starting after October 1, 2019.

Negotiations between the Revenue Service and TV stations about restructuring the old debt are still in progress.

The Ministry of Finance is aware of the important role of TV stations in the development of democracy in Georgia, and that is why the state took their interests into account as much as possible, the proof of which is the tax debt accumulated over the years, preferences on paying taxes and ongoing negotiations on their tax payment schedule, reads the announcement from the ministry.

The preference towards TV stations in paying their taxes creates a non-competitive environment and is unfair to other taxpayers who pay taxes [in accordance with a law],” said the ministry.

The Ministry of Finance says that protecting the interests of all taxpayers and manage public finances effectively is the obligation of the state, which means that tax income should be used for citizens and the state overall, for social and other important needs.

• Back in August 2019, Georgian Minister of Finance Ivane Matchavariani called on leading Georgian TV stations with high tax debt to present plans to restructure their accumulated debt within about two weeks. He said that previously, TV stations used to accumulate debt, which was later written off. He said this is a “malicious practice and it is time to change it”.