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The News in Brief

Tuesday, July 12
29 MPs owned business assets as of March 2016 - Transparency International – Georgia

“As of March 2016, 29 MPs owned business assets. In addition, 24 MPs’ family members run or owned companies,” states a report of Transparency International - Georgia.

According to the organization, only seven MPs indicated that they have income from entrepreneurial activities.

The highest incomes were indicated by: Kakha Okriashvili (about 4.7 million GEL), Gocha Enukidze (about 4.5 million GEL), Sergo Khabuliani (633 205 GEL), Gogi Topadze (611 052 GEL), Giorgi Kakhiani (44 500 GEL), Giorgi Zhvania (25, 000 GEL), and Zaza Kedelashvili (16 586 GEL).

According to Georgian legislation, a Member of Parliament has the right to own company shares or stocks, but he is not allowed to be engaged in business activities.

Ex-Opera Singer’s Party Unveils Economic Program

State for the People, an opposition party launched by retired operatic bass Paata Burchuladze, has pledged to cut personal income tax, to increase minimum monthly age pension by up to 39% and to reform the state-funded healthcare insurance, as well as social benefits system if it wins in the October 8 parliamentary elections.

Presenting its economic and social programme under which the party will run its campaign ahead of the elections, the State for the People said on July 8 that it will cut personal income tax from the current 20 to 15%.

It said that 15% corporate income tax would apply to only distributed profit – a reform which has already been endorsed by Parliament and which will come into effect from 2017.

According to its economic program, a taxpayer will have to register as VAT (value added tax) payer if sales during the previous consecutive 12 months exceed GEL 200,000 instead of current GEL 100,000.

It also pledges to double the threshold of annual turnover for businesses to be qualified as “micro business” to become eligible for tax exemptions up to GEL 60,000.

The State for the People also plans to reduce turnover tax from the current 3-5% to 2% for businesses with an annual turnover below GEL 100,000, which are classified as “small business”.

The annual property tax rate for an individual on taxable property (excluding agricultural land) varies according to the amount of annual family revenue of the individual.

It also offers to double the threshold of gross annual income to GEL 80,000 that makes a household subject to property tax.

The party also pledges to increase minimum monthly age pension from current GEL 180 to GEL 250, as well as 50% increase of subsistence assistance for socially vulnerable households, which now ranges from GEL 30 to GEL 60 per family member.

Pointing to the pattern of increasing number of beneficiaries of social allowances ahead of elections – a trend which was observed ahead of the 2012 election and which is also being monitored in the run up to the upcoming elections in October - the State for the People claims that governments tend to use this mechanism for electoral purposes, giving social allowances to more people as elections loom. To stop this practice, the party pledges to review households’ eligibility to social allowances only once in four years.

The party also plans to reform existing state-funded “universal healthcare insurance” programme to make it “targeted” to those who need it the most. The party says that as a result of personal income tax cuts, those who are employed will have more income to be able to pay for private health insurance policies, allowing the government to redirect funds to providing better insurance policies to the socially vulnerable part of the population.

In the short-term period, the party says, tax cuts will result in a 1.1 billion decline in tax revenues, but more than half of that can be offset through cutting bureaucratic expenses by 600 million GEL, as well as through government restructuring.

In a March poll commissioned by the International Republican Institute (IRI), Paata Burchuladze’s party was the third party in popularity, not too far behind the GDDG ruling party and UNM opposition party.

Abkhazian referendum on early presidential elections declared invalid

The referendum on early presidential elections in Abkhazia was declared invalid by a de facto electoral commission due to low turnout.

According to Abkhazia’s Electoral Commission, slightly over one percent of legible voters participated in the referendum.

An initiative group led by the Amtsakhara party started a petition calling for a referendum in March 2016. One 1 June, de facto president Raul Hajymba (Khadzhimba) scheduled the referendum on 10 July.

The opposition subsequently called to boycott the referendum, claiming the government did not give them enough time for pre-referendum campaigning. On 5 July, opposition activists organised a rally with the demand to dismiss interior minister Leonid Dzapshba, which escalated into an attempt to break into the ministry’s building. Raul Hajymba refused to postpone the referendum.

The opposition’s demands for a referendum come from their frustration with the rule of Hajymba, whom they accuse on failing to deliver on his electoral promises, corruption, and incompetence. Hajymba came to power in an early vote in 2014, after the previous de facto president Aleksandr Ankuab was forced to resign.
(DF watch)