Concept of Taxation: What is Taxation?
The tax code defines taxes not as an in equivalent and uncompensated transfer of sums to the State but as a liability of certain persons before the State so as this last can provide its citizens and all legal residents on the territory of Georgia with safe life and work environment. Thus, this new definition defines the taxes as a reciprocal liability of the State and a tax-bearer before each other. Such definition makes it clear to the tax-bearer that the taxes are not some tribute but a sum payable by a tax-payer to the state administration on legal grounds, which by force of law must be used for his own interests.
Repeal of sub-laws (instructions) in taxation. Draft Code itself contains detailed directives concerning calculation of tax rates and samples of the accounting forms (declarations). Therefore, it does not envisage working out and publication of guidelines relating to taxation. Such approach is accounted both by international practice (forbidding specification of taxation procedures by standard acts ranking lower than Law) and own experience which proves that very often instructions instead of clarifying the rule of law make it even more incomprehensible). Moreover, there are frequent cases when definition given by an instruction is absolutely contradicting the same rule of law it defines. Read more
Georgian Capital Market: Problems & Solutions
The primary role of the capital market is allocation of ownership of the economy’s capital stock. In general terms, the ideal is a market in which prices provide accurate signals for resource allocation: that is, a market in which firms can make production-investment decisions, and investors can choose among the securities that represent ownership of firms’ activities under the assumption that security prices at any time “fully reflect” all available in- formation. A market in which prices always “fully reflect” available information is called “efficient.”
This paper overlooks Georgian capital market. Unlike many central or eastern European countries that have been running organized stock exchanges before imposition of communist regimes, the first stock exchange in Georgia appeared only in 1992. On the other hand, suspension of the close economic links with CIS countries that had been forming during decades caused large GDP declines leading to the appearance of unstable economic environment and high risk of investment. These factors make problems of Georgian capital market very specific that is blocking domestic and international portfolio investment. Read more
