Bakhtadze Reveals Preliminary Plan for Economic Reforms
Candidate for Prime Minister Mamuka Bakhtadze, whose candidacy is widely expected to be confirmed soon, spoke today at an extraordinary session of parliament. His speech touched on many issues but emphasized his government’s plan for Georgia’s economic development and financial reforms.
Inclusive economic growth is his government’s priority for economic policy – an important consideration in a country with high inequality. Georgia’s GINI coefficient is 36.5, on a scale of 1-100, with 100 being maximal inequality (World Bank, 2016). This is down from 2010’s record high of 42.1, but still among the worst of the former Soviet republics.
Bakhtadze spoke about the policies his government would enact, should he be approved, saying “This means the involvement of society in the development of economy. Yes, we have a good economic growth rate, but it lacks the component of inclusivity. In the development of the country’s economy the private sector takes the leading role and its role should be increased even more. For this reason, it is important to further improve the business environment.”
Bakhtadze listed several specific policies he would like to enact, including:
- Back taxes incurred before January 1, 2013 will be fully annulled.
- Reform on VAT returns – business owners will be able to pay VAT returns online in 5-7 business days.
- Continued removal of bureaucratic barriers for businesses owners. A unified online system will replace the current tax payment system for businesses, including simplified tax and customs codes.
- All taxes except from the VAT will run on blockchain technology.
- New tax policies will be implemented to encourage multinational companies to establish regional offices in Georgia.
- Foreign investors will be able to register their businesses online in Georgia, open accounts in Georgia’s banking system, and manage the legal aspects of their companies online.
- A commercial court system will be established to review commercial and tax cases.
- He would like to implement a preferential tax regime for small businesses by July 1, 2018, which will decrease taxes for small entrepreneurs by five times. The definition of small business will also expand from a business with an annual turnover of less than 100,000 GEL to 500,000 GEL.
Bakhtadze has also expressed a desire for capital market reform, pension reform, increased public-private partnerships, and a more responsible lending system, particularly regarding e-loans. At the same parliamentary session, he announced that monthly pensions would increase by 20 GEL a year in 2019 and 2020.
By Samantha Guthrie
Photo: 1TV
Related Stories:
2019-2020, State Pensions Will Increase by GEL 20 Per Year