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Tax + Debts=Unbearable Life

May 28, 2008

Shorena Kakabadze, Kutaisi

Flat of Avtandil Kikvadze, a resident of Kutaisi, has been in the dark already for six months. The old man who lives there is sure that he is not guilty for not being able to pay his bill. One day, the lonely old man, who uses only one bulb and  watches a bit  TV in the evening, received a bill with a huge debt attached; it was so much that he could not afford to pay. Electricity meters in the district where he lives have not been installed yet. People have been using the communal ones left over from the communist times.

“I received such a huge bill that I became confused. How was it possible to run-up such a large bill?  I am a lonely man and get at home only in the evening? I switch on only one bulb and TV set that is watched at most only for two or three hours. Everything happens because our country is not properly governed and heartless and bloodless people are working in the power distribution companies. They cannot speak with people humanly and don’t know what is public relations.  Whenever I came there they treated me like a dog, as if I was demanding something extra; I have only one problem, I am tired of living in darkness,” said Avtandil Kikvadze.
Joint Stock Compnaym, JSC, “Energo Pro Georgia” explained to the subscriber that he had to pay old debts on electricity. Otherwise he would not be supplied with the electricity. Despite 50 GEL vouchers granted by the Georgian president, the subscriber still has some debts that were corrected only after the Human Rights Center became involved the situation.

JSC Energo-Pro Georgia started distribution of the electricity in Georgia since July 1 2007. The company accepted the subscribers without old debts. The representatives of the distribution company explain that the new company did not have right to demand subscribers to pay old debts.

The Predecessor of the Energo-Pro Georgia, the United Energy-Distribution Company of Georgia was state company. Thus, in December of 2007, the representative told that according to the resolution of the Georgian government, each subscriber was discharged from their old debts. Now their debts have been accumulated since July 1 2007. If subscribers do not pay the bills, they will electricity supply will be disconnected,” said Teona Geguchadze, chief specialist of the Public Relation Department within the Central Western Georgian Branch of the Energo-Pro Georgia, JSC.

Besides Avtandil Kikvidze, most part of Kutaisi residents complain about endless debts to the energo-company. “It is something of a method of extorting as much money as possible from people. They are capable of doing anything in order to fill their budget.”

“Old debts are substantial enough and now they are pressing us with new bills. We cannot warm our houses in winter. It is just too expensive as the rate for electricity is so high. The situation is also bad in summer because of the need for air condition. However, it is fortunate that the weather is now warmer and we do not need to spend so much on electricity. However, our bills have not decreased whatsoever. Why do they make us to pay so large bills? Are not they ashamed of their behavior? They do their best to charge us with more than 100 kilowatt/hours so that we paid the bill according to second category of subscribers. Asked subscribers living in Javakhishvili Street in Kutaisi, “what the hell is it, who divided subscribers in categories and what is the purpose of it?”

According to the resolution # 18 of the Energy Regulation National Commission of Georgia, dated by May 15 2006, the tax on electricity has doubled since June 1 2006. Subscribers were divided in categories. Those who spend 100 kilowatt/hours has to pay 11, 0 tetri for per kilowatt; those who spend from 101 to 300 kilowatt/hours pays 14, 0 tetri; and over 301 the tax is 14, 83 per kilowatt. Subscribers have to pay additional VAT to the estimated tax and finally the first category pays 12, 98 tetri; second category pays-16, 52; and the third one pays 17, 19 tetri.

“We decided to divide subscribers into categories after we surveyed how many people used more than 100 kilowatt electricity a month. The main point of the decision was to offset the burden of taking money from the population. It was necessary to take some measures and that is why we divided them in three different groups. Our balance is in deficient. Consequently, we introduced similar stages to protect socially excluded people. It is the rule of a market economy that the more that a subscriber uses than the more that that person has to pay. Under this system there is an added cost for rich people and they are a bit suppressed. However, we promise that as soon as the balance is not so far in the red and that competition at the market will increases, then we will reduce the tax,” said Demur Chomakhidze, advisor to the Chairperson of the Energy Regulation National Commission of Georgia.

The Energy Regulation National Commission was established in 1996, and it is set up and operates according to international practice. It serves to protect subscribers from monopolist prices. In addition, the aim of the ERNC is to regulate the energy sector and to support economical stability.

Lina Jervalidze, energetic expert, explained that the ERNC cannot protect subscribers. “According to the resolution of the Georgian parliament, the tax on electricity shall be gradually regulated. It should reflect various payments for various categories of subscribers. The document is very difficult to understand. Generally, the more a subscriber uses electricity, the less is spent on that service,” said Jervalidze.

It is fact that the electricity tax is a serious burden for Georgians. Energy-regulation commission whose main responsibility is to estimate taxes and protect subscribers, however, has been unable to implement it full responsibilities. Experts define that the commission is seriously suppressed from governmental officials, which in turn negatively impacts population proportionally.

“We are tired of the injustice. Sometimes they demand old debts, sometimes they make us pay more than we have actually spent. Somebody should be responsible for the issue, and the rights of subscribers’ rights are not being protected; nobody cares to improve the situation. Nobody can enter the Energy-distribution company to find out the truth. Nobody will answer your questions,” said Avtandli Kikvidze.

The overall situation that actually exists demonstrates that people will have to spend much money protect themselves from the heat of summer, and this was the case with heating in the winter. And if subscribers will have to pay old debts together with new balances, the situation will not be too pressing. The ERNC and the Georgian government do not care about the rights of subscribers. However, according to the law, both of them must work together in protect them from unfair treatment.
 

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