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16 July, 2019 15:40
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OGT LLC RESPONDS TO THE REVENUE SERVICES

On July 14th of the current year, the Revenue Services immediately responded to the story of “Saturday Courier” on “Rustavi 2” about “the new wide corruption scheme in the cigarette business” and in order to avoid responsibility in this scheme tries to ignore the official data used for qualified preparation of the program.

Let us go through the circumstances provided by the Revenue Services as excuse:

  1. The Revenue Services states, that:

It is excluded that any company takes more stamps, than there is a demand of the cigarettes with the relevant excise stamps on the market.

Based on the official sales data of 2018, it is obvious, that during 2018 market demand for the production of “Tbilisi Tobacco” was 41.7 million packs. And the Revenue Services issued 92 million excise stamps for this company in 2018, which “by the simplest arithmetical calculations” is for 50.3 million packs more than the market demand. To say it otherwise, the Revenue Services gave to “Tbilisi Tobacco” 220% of market demand, or for 2.2 times more excise stamps.

2. The Revenue Services inform us, that:

“The excise tax is paid not when the excise stamp is issued, but when the company produces and sells cigarettes on the market“

Definitely, any company, working in the tobacco industry knows it. That is why, “Tbilisi Tobacco” made a non-commodity operation with extra 50.3 million stamps illegally issued to them at the end of the year; or they sold the goods, which were not produced.

3. The Revenue Services reproach OGT LLC for issuance of excise stamps in December.

Note: from July 2018, after illegal and forcible seizure of issuance excise stamps to OGT LLC, in November and December, with some political considerations and advance payment of fixed excise, advance and VAT taxes, the Revenue Services issued to OGT LLC according 2.5 million excise stamps, when “Tbilisi Tobacco” was provided with 50.3 million excise stamps. It would be good if instead of oral statements, the Revenue Services look into the official documents and so make “the simplest arithmetical calculations

4. The Revenue Services call absurd the corruption scheme, which is clearly played by official documents. As the Revenue Services state:

The baseless is also the statement that the state budget lost 60 million by nonexistent corruption scheme, which is just an absurd and which can be proved just by simple arithmetical calculations.

In case, the Revenue Services really provides excise stamps to “Tbilisi Tobacco” according to the market demand, then they would not issue illegally extra excise stamps to this company in December 2018, but from January 1, 2019, i.e. according to the increased excise. The difference between the old and new excise is 1.1 GEL per pack. “With the simplest arithmetical calculations” difference for one pack of fixed excise tax for extra issued 50.3 million stamps made 55.33 million GEL. Taking into consideration the increased sales price relevant advance rate and VAT, “With the simplest arithmetical calculations”, the amount payable to the budget makes more than 75 million GEL, which is paid by consumers from January and which, instead of budget, is directed to the “black hole”.

5. It seems that the Revenue Services have overlooked that, in connection to non-commodity operation in December 2018, 18 million GEL liability towards the state budget was fixed on the name of “Tbilisi Tobacco” on January 15, 2019.

Their such forgetfulness is not surprising, as in difference with OGT LLC, they did not execute any coercive measures towards “Tbilisi Tobacco” for withdrawing tax liabilities. This once again proves the discriminative attitude from the government towards OGT LLC.

OGT production was stopped right in order to leave “Tbilisi Tobacco” without competitor, left 1500 people unemployed and ignored leaving their families without income.

The sad fact is that the Revenue Services of the Ministry of Finance of Georgia, with similar irresponsible statements compromises harder its own agency and government in general.

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