How did the Parliament Chairman, Shalva Papuashvili, acquire 100 000 square meters of forest on the banks of the Alazani River in Kakheti for 1 GEL, when the price of 1 square meter of land in the same area is 5 dollars? We will explain how the deputy deceived the state and purportedly evaded paying a substantial amount of taxes to the budget.
Regarding this topic, the Parliament Chairman has been attacking the internet publication Batumelebi for several days. It was the first to spread information about the possible crime committed by Papuashvili.
Shalva Papuashvili uses the immediate recognition of Batumelebi as the responsible media that allowed inaccuracies in the material to arise. This is an attempt to avoid the need for the Russian Law about Agents and thereby cover up an important story that the prosecutor's office should have investigated beforehand.
Unconfirmed Information Found in Property Declaration
In his property declarations, Shalva Papuashvili indicates that he has co-owned 200,000 square meters of forest and 100,000 square meters of land since 2011.
Chairman of Parliament's Property Declaration
If we rely on the information included in Papuashvili's declaration, he acquired these estates in the year before the last year of National Movement ruling.
However, the materials requested from the Public Registry Agency did not contain any documents confirming that Papuashvili was the co-owner of these lands since 2011. Papuashvili did not provide us with such a document even after our written appeal.
Vladimer Kutateladze, lawyer of the Civil Activities Center, stated: "The term 'actual co-ownership' is incorrect and not recognized by civil legislation. Ownership arises from the moment of registration in the register. If they had any ownership document before that, then why was it necessary to sign a purchase agreement, when it would have been possible to register with that document?"
What was the need for Shalva Papuashvili to enter incorrect information in the property declarations, claiming that he was the actual co-owner of these lands since 2011, and in 2020 he was only registered as the property owner? Let's follow this chronologically.
20 hectares of forest for 1201 GEL
This dense forest, covered with perennial trees, which Papuashvili has designated as a pasture, is bordered by the Sighnaghi-Lagodekhi highway on one side and the Alazani River on the other.
Documents we requested from the Public Registry Agency show that in 2004, shortly after the National Movement came to power, 20 hectares of forest and an equal amount of pasture in the Sighnaghi village, Vakiri, were leased for 49 years to Zurab Papuashvili, who is Shalva Papuashvili's cousin.
In 2011, prior to the National Movement leaving office, the state sold all forty hectares to Zurab Papuashvili, which included 20 hectares of forest. Papuashvili paid 1201 GEL, equivalent to 60 GEL per hectare.
A Sham Deal
In December 2020, after being elected as a member of the Parliament of Georgia from the Georgian Dream party list, Shalva Papuashvili signed a purchase agreement with his cousin, Zurab Papuashvili. The contract stated that Shalva bought 10 hectares of forest from Zurab for 1 GEL and paid an additional 1 GEL for 10 hectares of arable land, totaling 2 GEL for 20 hectares.
If the cousins had actually gifted the land to each other instead of purchasing 1 GEL, according to the law, Shalva Papuashvili, as the recipient of the gift, would have been liable for income tax.
That's why lawyers believe that by engaging in a fraudulent transaction, he deceived the state and evaded paying taxes.
Vladimer Kutateladze, lawyer: "It is evident that the market value of the property of this size in that location cannot be 1 GEL. Hence, it is an actual gift disguised as a purchase. A gift is subject to taxation, whereas property bought under a sales contract is not subject to taxation. Therefore, we can boldly assume that it might have been an attempt to evade taxes."
Tax Evasion
Income tax is 20% of the market value of the land. We have investigated the actual market value of land plots in the Vakiri village, Sighnaghi district, including Shalva Papuashvili's properties, as of 2020 and 2024. Currently, land prices are lower than in 2020. Following the onset of the war in Ukraine by Russia, the price of Georgian wheat dropped, leading to difficulties for farmers in selling their crops, consequently causing a decline in land prices in Sighnaghi and Dedoplistskaro districts.
The brokers operating in Tsnori informed us that the current price of 1 square meter of land is approximately 5 USD and ranges up to 6 USD by 2020.
We have spoken with three individuals engaged in land buying and selling activities. Additionally, we have observed publicly available announcements indicating that the price of one square meter of land in Tsnori is significantly higher than 5-6 dollars.
If we calculate the minimum price of one square meter of land not at 5 dollars, but at 5 GEL, which is three times cheaper, the total value of the forest and arable land bought by Shalva Papuashvili for 1 GEL each would still reach 1 million GEL. Based on these calculations, Shalva Papuashvili should have paid at least 200 thousand GEL to the budget.
Papuashvili did not respond to the written question regarding whether he evaded paying taxes to the budget. The Parliament Chairman did not address this key question during his meeting with the media in Batumi. He only stated that the assertion that he signed the property over for 1 GEL, bypassing the law, was false.
The Revenue Service informed us that the case is considered old, as more than three years have passed since the transaction.
However, intentional evasion of a substantial amount of tax is also subject to criminal prosecution. The law defines a substantial amount as exceeding one hundred thousand GEL. The statute of limitations for such cases extends until the end of 2025.
