Govt' Presents Anti-crisis Plan to Reduce Coronavirus Impact on Economy
The Government of Georgia has presented an anti-crisis plan for local businesses in order to stimulate the economy and ease the burden caused by the coronavirus crisis.
The government responded to the demand of businesses linked to tourism, such as hotels, restaurants, travel agencies and tour operators in Georgia, and decided to postpone payment of property and income tax by four months.
The Prime Minister announced at a special briefing on Friday that the plan implies concrete measures, and their implementation is expected to create additional financial resources of 1 bln GEL in the economy of the country.
In particular, the government's plan for stimulation of the economy envisages the following measures:
1. Businesses that encounter problems in servicing their loans will have their liabilities restructured by commercial banks on an individual basis. The hotel industry alone will see around 100 mln GEL liberated as a result of the process;
2. Citizens who desire to postpone their loan repayment will be given such opportunity by commercial banks in the coming three months;
3. Companies that operate in the tourism industry: hotels and restaurants, travel agencies, passenger transportation companies, sightseeing companies, arts and sports event organizers, etc. will get their property and personal income taxes freed up by the Government of Georgia for the coming 4 months (the due date for the latter being November 1, 2020). Tax incentives will apply to 18,000 employers and over 50,000 employees. It means that over 100 mln GEL will remain in this sector of the economy;
4. The Government of Georgia will double the volume of VAT refunds to companies with the aim of supplying them with working capital and instead of the 600 mln GEL originally intended by the Ministry of Finance of Georgia (MOF), 1.2 bln GEL (by 600 mln GEL more) will be refunded by the end of the year;
5. A tailor-made State Program will be designed to co-finance the interest payment on bank loan borrowings by hotels with 4-50 rooms throughout the country for the coming six months. This project will apply to about 2000 hotels operating in the country, which might have otherwise run into significant financial losses as a result of the coronavirus pandemic;
6. Apart from the above-mentioned, the State will augment its support towards capital expenditure (CapEx) projects with an aim of providing additional economic incentives. CapEx envisaged in the State Budget of Georgia for 2020 will be increased by 300 mln GEL.
The Government of Georgia is already working towards optimizing the banking regulations, which will create an additional incentive for facilitating the economic performance in the country.
Negotiations with International Financial Institutions (IFIs) have already been started for soliciting financial resources from their special allocations.
By Ana Dumbadze
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