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Zurab Lalazashvili: Tax Evasion And Hidden Taxes Must be Separated From One Another

Zurab Lalazashvili: Tax Evasion And Hidden Taxes Must be Separated From One Another

BDO’s managing partner approves decriminalization of economic crimes, but regards that it is important for the legislation to get closer to developed countries, thus tax evasion and “hidden taxes” must be separated from one another.

Zurab Lalazashvili says that there would not be necessity to increase the established limit for criminal responsibility in the case of introduction of this new model. The businessman also considers specific cases, that if the company is trying to pay less tax by using the legislation, its management should not be the subject of criminal liability even the tax authorities  disagrees with it, but it does not exclude the imposition of fines.

The Head of Customs and Tax Committee at Business Association notes that this case is radically different from tax evasion, when the company hides taxes in violation of the law and does not submit full declarations, etc. In this case, the criminal liability can be set from a lower limit.

“I think that this theme should be developed in this direction at the second stage, but at this stage neither the revenue service nor the government is ready for that,” says the businessman, noting that administration needs a good resource, including human, since it is not easy to separate tax avoidance and “hidden taxes”, – including court cases exist in developed countries.

Zurab Lalazashvili positively evaluates another change in the Tax Code, which implies the release of VAT and excise part of the aviation fuel.

“If there is opportunity to set up and develop domestic flights, of course we welcome,” – says Lalazashvili.

To remind, as of the amendments, the new package increases the amount for criminal liability from 50,000 to 100,000 GEL. In addition, criminal liability is abolished for tax offenses related to waybills, excise stamps, and others.