Government Gets Profit from the Charity for Disabled Adults

Nana Laghadzishvili, fact.ge

In the country, where most people live in the hardest conditions, the charity is always welcomed. A lot of good was done by charity-mongers but like everything else in Georgia, the charity has its “national characteristics.” The eminent example of this is the charity show of the Rustavi 2 “Who Wants Twenty Thousand (GEL).”

 One of the manifestations of the Georgian nature in it is that it is very hard to participate in the show without the support of a friend/acquaintance. Besides, one of the features of the Georgian charity is that the state, to say it roughly, gets its share from everywhere, even from the seriously sick people.

The scheme is following: the telephone companies Magti and Geocell get the 18% of the sum from the phone calls as a value-added tax to pay to the state budget. The rest money is transferred to the TV Company Rustavi 2 which also takes its 15% from the sum. As we have found out with the company representatives, the show is an English project whose license is leased by the TV Company and not purchased; so they pay the 15% to the British company. In addition to that, the beneficiaries pay the revenue tax of 20% to the state budget. We could not get in touch with the producers of the TV-Show and calculated the average sum which is transferred to the beneficiary from every 1 GEL (the cost of a phone call) ourselves.

18% is taken from each lari as a VAT; then 15% is cut off the remaining 82 tetri for the British Company. After that 20 % is cut off 69, 7 tetri as a revenue tax and only 55, 76 % is transferred to the addressee. In short, the state budget and the British Company receive 44, 24 % from the money and the beneficiary receives only 55, 76 %.

Expert Demur Giorkhelidze made a short comment about the issue: “The charity projects abroad are free from tax according to the national legislations. In our country, like in many other fields, the legislative system should be accomplished. In the case of the “Who Wants Twenty Thousand”, certain amount of money is discharged based on the Tax Law. Consequently, the law should regulate the process and free the charity from taxes.”

Expert Soso Archvadze could not make long comment either: “It is a private company and they have right to reimburse all their expenses from the sum they receive from advertisements and phone calls. The ministry of finances shall control the balance in it.”

To make the situation clearer, we discussed the TV-Show of April 13 where actor Vaniko Tarkhnishvili played for ten-year-old Mari Nadiradze. We calculated the money with the support of Soso Archvadze. “According to the subtitle of the TV-show, 62 198 phone calls were made during the program which is proportional to the sum transferred by TV-viewers; so the cellular phone companies (Magti and GeoCell) received 62 198 GEL. Initially, 18 % for the VAT – 11 195 GEL was cut off the sum; then 15% was cut off from the rest 51 003 GEL – Rustavi 2 transferred the 7 650 GEL to the British Company and 43 353 GEL remained. 20% of that sum – that is 8 670 GEL – was cut off as a revenue tax. Finally, 27 525 GEL was transferred to the state budget and the project owners out off the 62 198 GEL and Mari Nadiradze finally received only 34 683 GEL. 20% was cut off 4 000 GEL - the sum won by Vaniko Tarkhnishvili.

So, each lari, transferred by the TV-viewers is divided in several parts and almost half of it gets into the moneybox of the government. When the charity is taxed, it can hardly be called charity.

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