Georgia’s revenue service has suspended the tax audit of Palitra Holding, one of Georgia’s largest media groups. The Revenue Service’s order, dated September 18, does not give any reason for the suspension.
The GRS had only nine days left to complete their inspection when they suspended it “indefinitely”, after extending the deadline twice in three months.
It was on June 7 the news broke that the Georgian tax inspection had physically sealed off the premises of all Palitra Holding’s six divisions an initiated a full check-up of the company. The step was seen by many as politically motivated.
Other Georgian newspapers quickly voiced their solidarity with Palitra in connection with the audit. The deadline was extended twice, but it was finally to have been completed by September 29.
“It could mean that the results of the whole inspection process is undesirable for them” — Levan Kalandadze, economic analyst
“The reason for the suspension is the process of summarizing data,” Ana Gogichadze, spokesperson for the Revenue Service’s PR department, said at a press conference. She did not specify why an indefinite period is needed for the summarizing process.
The only case in which a tax audit may be legally suspended is if there is a force majeure or other severe situation, according to Georgia’s tax code. But during the last three months, there has been no force majeure in the country. The law specifies force majeure as meaning natural disasters, war or public anxiety.
“The reason for the suspension could be problems within the Revenue Service,” explains Levan Kalandadze, economic analyst, “it could mean that the results of the whole inspection process is undesirable for them.”
Palitra is a media group involved in a broad range of activities, ranging from newspaper and radio to book publishing. It is one of few media houses in Georgia which both has an independent voice and is successful commercially. It has at times challenged the government’s line on ongoing events. In February two policeman were dismissed as a result of a video published by Palitra.
In May, Palitra published a video on their website which contradicted the Interior Ministry’s computer graphics-account of how a policeman died during the tumultuous night of May 26. The footage was originally shot by a cameraman from Channel 24, a small TV station in the Adjara region, but reposted by Palitra.
Halting the tax inspection does not mean Palitra are let off the hook. The law allows the revenue service to resume their work at any time, but in that case they will have only nine days left to complete the process.
“This process should have ended in nine days. We were informed about the preliminary results of the tax audit, and there were no significant violations,” says Marika Darchia, creative director of Palitra Holding. “They have nine days left to finish the inspection. Nobody knows when they will resume the process and spend those last nine days.”