Small entrepreneurs will pay decreased taxes

The Georgian Government is trying to resolve the difficulties created by the August War and the world financial crisis by liberalizing its legislation.

According to Georgian Prime Minister Grigol Mgaloblishvili, the tax system will be simplified and certain taxes will be reduced, and this will promote the development of local industry. “Georgia should become more attractive with its liberal economy and low taxes. What we need to achieve this is, first of all lower taxes, second a more attractive business environment, which is naturally followed by the creation of new jobs,” Grigol Mgaloblishvili noted.

According to the Finance Minister Nika Gilauri, the Government has studied the discussions resulting from different interpretations of several Articles of the Tax and Customs Codes. The planned amendments will apply to 220 Articles of these Codes, which have 500 between them. Along with other changes, the tax tariff for individual entrepreneurs will be simplified. If the turnover of an individual entrepreneur is less than GEL 40,000 he will not pay dividend tax. If it is between GEL 40,000 – 100,000, the dividend tax will be 0.2 %, and only if turnover exceeds 100,000 will the tax be 1%.

The Finance Minister says that the period on which to return Value Added Tax will decrease from 6 to 3 months. In addition, the amendments in the Customs Code envisage implementation of the declaration system for imported goods.

To compensate for the decreased and abolished taxes the Government will increase gambling and entertainment taxes fivefold, and it is probable that restaurants and hotels will also have to pay increased taxes.