Issue 1, 2013 February-March - Investor.ge

More documents

Recommendations

Info

(HoReCa) sector in Georgia totaled $228million,” the report noted.“Additionally, for the period of 2007-2012, foreign direct investment in theHoReCa sector in Georgia amounted to$516 million.”Based on those projects, KPMG predictsthe number of hotel beds in Tbilisiwill grow by eight percent annually overthe next four years.“To be honest, I think there is [room]for more hotels…I have got a feeling thatthe demand will grow further because itis great to do business here. If you stepin, you see how many big companieshave settled down here, big internationalglobal players,” Heidingsfelder noted. “Ibelieve the demand for hotels will grow.”But while the increase in tourists hasbeen good for the industry, the sheervolume of hotel beds set to hit the marketcould have an adverse affect on allthe hotels, Steve Johnson, the owner ofBetsy’s Hotel, warned.“In 2011there was 68 percent occupancy,in 2012 a 82 or 83 percent[occupancy rate] and we really had towork hard; we have 57 rooms,” he said.“The rates are going down, down,down…With the government pushingthree stars to come in, it is just going tokill everybody who is above a three starbecause they are going to charge $60,$65 – they are going to go to Europeanrates.”With more hotels to choose from,travelers’ preferences will shape thefuture of the Tbilisi market.KPMG found that out of five factorsfor choosing a hotel room (friendlinessof staff, cleanliness of rooms, location,image/reputation, and price), travelersput more importance on the staff thanany other single indicator.
AmCham President,Sarah Williamson,and theCo-Chairs and DeputyCo-Chairs of the AmChamCommercial Law and TaxCommittee;Ted Jonas,Andrew Coxshall, LashaGogiberidze and RobinMcCone, along with Am-Cham ED, Amy Denman,met with Director Generalof the Revenue ServiceLasha Khutsishvili, DeputyHead Giorgi Bakradzeand International RelationsDepartment representativeDachi Kinkladzeon January 31.Several issues of importance werebrought forward during the 2.5 hourmeeting, and are outlined below.Thank you to all the members whobrought forward issues and problems toassist us in preparation for this importantmeeting. We incorporated as manyas possible, and continue to work withthe Revenue Service and the workinggroup on additional issues raised by ourmembers.AmCham expressed the concern ofmembers over the large number of, andhastily performed, tax claims (i.e., collectionacts) issued at the end of 2012.We stressed the need for an effective andlogical risk-based audit approach ratherthan a “carpet bomb” approach to the taxaudits of companies.We also stressed that the mediationprocess should be put back into place.The GRS replied that many of thecollection acts were issued later in theyear due to a suspension of audits duringthe months around the elections.TheGRS informed that they are workingtowards a more consistent system of arisk-based audit approach which shouldbe in place by the 4th quarter of 2013.The risk analysis formula is being revisedand the scheduling and planning of auditswill be regulated more effectively. Mr.Khutsishvili assured us that the mediationprocess will be put back in place,and agreed with AmCham that the timeperiod for the taxpayer to respond tothe draft claim prior to the initiation ofmediation should be extended from 5days to 10 days.AmCham strongly objected to therecent tax audit practice of charging VATon transactions that are, by law, VAT exempt.This has been an issue of concernfor many of our members. And while theclaim is almost always overturned in theappeals process, the incorrect issuance ofthe claim in the first place wastes enormousamounts of time, money and staffresources of our members.Mr. Khutsishvili agreed that this isan issue. He suggested that companiesmight need to produce clearer and wellorganized supporting documentation onthis issue.AmCham responded that it is ratheran issue of training tax inspectors andeducating them on this issue. When aninspector makes the same erroneousclaim repeatedly, causing not only bad
Page 4: © The American Chamber ofCommerce
Page 10 and 11: In power for just three months, the
Page 12: Based on data from November2012, IS
Page 15: seeks to capitalize best practice a
Page 18 and 19: years due to the increased interest
Page 21 and 22: In the eight months since theinaugu
Page 27 and 28: Recent statistics indicate thatGeor
Page 29 and 30: Chubinidze, who started workingin r
Page 32 and 33: There is a heated debate in Tbilisi
Page 36 and 37: will between compliant tax payers a
Page 39 and 40: Kote Sulaberidze discovered hewas c
Page 41 and 42: artists hawk their wares to tourist
Page 43 and 44: of the Transcaucasus, and, later, t
Page 46: AmCham Georgia has been hard atwork
Page 49 and 50: Gryphon -FK is a US corporationenga
Page 52 and 53: 7th fl77 Kostava St., Bld.6, 4th fl
Page 58: In Tbilisi since June 1998, Sarah W

Issue 1, 2013 February-March - Investor.ge

Create successful ePaper yourself

Delete template?

Save as template?