New tax code and budget to boost Georgia

The Government of Georgia is fighting unemployment by encouraging private sector development, Prime Minister of Georgia Nika Gilauri told his colleagues at the Government sitting of June 10 at which the new tax code was discussed. “Analyses have revealed that the tax code has been among the top deterrences for business development in the country. Despite the fact lots of changes have been made to the code over several years, the basis of the text is still old fashioned and that’s why we are offering this new document to the public,” explained the PM, stressing that the Government has been working on the new code with the private sector for months.

“There are a lot of new things in this document and I would like to encourage all businessmen, investors and interested parties to make themselves familiar with it and give us their remarks and views. The engagement of all interested sides is important to ensure the transparency of discussions on this issue,” Gilauri said, explaining that businessmen can apply to the Ministry of Finance of Georgia with a question or request and use the answer they receive as a rule of operation. The new tax code will be sent to Parliament for further discussion in about a fortnight.

On the same day Deputy Finance Minister Papuna Petriashvili reported on the fulfilment of the state budget for 2009 to members of the Parlaimentary Committee on Defence and Security and introduced them to planned changes to the 2010 budget. “Economic growth and additional grants have enabled us to make some changes which will increase the projected budget income by GEL 215 million in 2010, GEL 65 million of this coming from grants and GEL 150 million from taxes,” said Petriashvili. “This amount will be spent on infrastructural and social programmes and compensation for IDPs. Additional money will be used for rehabilitating the Sarpi customs checkpoint and building two more,” the Deputy Minister added.

The Christian-Democratic Movement (CDM) advised the Government to stop wasting money on building prisons, as this had left an insuffficient amount for education and healthcare in the 2010 budget. “Let them add GEL 5 million to the budget and increase funding for the healthcare system and provide schoolchildren with all necessary books,” CDM MP Levan Vephkhvadze said, stressing that he remembered the promises made by the ruling party in its election campaign.

Several MPs were not interested in attending the discussions about the budget. Jondi Baghaturia and Petre Mamradze were the only independent MPs who attended the sitting. Mamradze demanded that Petriashvili explain whether the delay in paying wages at public institutions was connected with problems at the Treasury. “I fully assure you that there are enough financial resources in the state budget to cover all expenditures,” Petriashvili said, asking Mamradze to provide detailed information about these delays so that the problem could be addressed. Petriashvili also denied the accusations of opposition representatives and analysts that the Government had increased the State Budget after the fluctuation of the GEL rate, saying that the changes had been planned long before the GEL had started to devalue.