Ministry of Economy Fixed on Pension Reform

The Georgian government says it will not take expert advice about the Accumulating Pension Program. Deputy Minister of Economy, Eka Mikabadze, made a clear statement on the TV program ‘Analytics,’ to the effect that the government will not consider reviewing the obligatory pension system.

“Income tax reduction and review of the system's obligations will not happen,” Mikabadze said, highlighting that pension contributions are not taxes, neither by the definition of the Organization for Economic Co-operation and Development (OECD) nor by the Georgian legislative framework.

“The pension contribution should not be considered a tax. It is a means for employees to make savings, which will later be used for his/her own good," she said.

Mikabadze went on to note several reasons why the pension contribution should not be considered as a tax, in particular that the pension contribution will be transferred directly into property and that it will be reflected on a person’s own bank account - accordingly, it will not be merged with the budget or treasury.

Nia Pataraia