Ministry of Finance Summarizes Past Three Years
The Minister of Finance, Nodar Khaduri, presented the results of three years of work on October 19 at the hotel Tbilisi Marriott, in the framework of the Georgian Government for Open Governance project.
According to the report presented by the Ministry, in 2013-2015 the correct distribution of the state budget changed the structure of the state budget and the country’s main financial document. It was planned to increase social programs and finance projects that would ensure the economic development and stability of the country in the medium and the long term periods. For three years, the Ministry of Finance has taken important steps towards social support.
“I believe that despite the difficulties, the past three years were successful for the Ministry of Finance. Significant reforms in public finance management were implemented in terms of transparency. Serious efforts have been made in terms of legislative liberalization. Most importantly, the Ministry of Finance protects the right of property and we don’t enforce measures until the end of a tax dispute,” stated Minister Khaduri.
He believes that increased financing of the ministries of Education, Health and Agriculture is an achievement. Funding of ministries has increased most rapidly since the Georgian Dream came to power. Compared to 2012, financing healthcare increased by 55%, education by 35% and agriculture by 81%.
Minister Khaduri spoke about international studies on budget transparency. According to the results of the ‘Budget Transparency 2015’ published by International Budget Partnership, Georgia has 66 points and is in 16th place among the world’s 102 countries, thus greatly improving its position compared to a similar poll conducted in 2012 (according to the 2012 Index, 33th place).
According to the report, the Ministry of Finance has taken significant steps in the direction of tax liberalization. The tax exemption of the construction sector, accumulated until 2008, is one of the factors for the high economic growth in this sector. The Ministry, together with old tax exemption, plans to reform profit taxation. However, according to the draft budget for next year, cancellation of profit taxes is not planned. According to the Minister, the Ministry is working on profit tax projects.
The Minister further stated that they don’t want to talk about the matter in advance, “but everyone knows that we are working on profit tax to improve investment.”
He also talked about the non-taxable minimum program. In 2014-2015, issued non-taxable minimum amounted to 254 million GEL. However, the government plans to cancel this project in 2016.
Minister Khaduri also spoke about the Budget and Treasury reform, through which state agencies have been united in the unified treasury account. As a result, the annual turnover of public finances, more than 3 billion GEL, came under budget treasury regulations.
The Minister considers the events of the international financial institutions as a special achievement in Georgia, including the annual meeting of the European Bank for Reconstruction and Development (EBRD); annual meeting of the Black Sea Trade and Development Bank (BSTDB); hosting of the Silk Road Forum; becoming a member of Asian Infrastructure Investment Bank (AIIB) and opening the Georgian representation of the European Investment Bank (EIB).
Ana Akhalaia