Government seeks to free farmers from VAT

The government has completed legislation which aim to make local agricultural products cheaper. Changes to the law are designed to exempt agricultural products from VAT.

Critics have noted that these amendments may not be effective in stimulating agricultural production and lowering prices. So far, farmers with annual turnover less than 100 000 GEL are already benefiting from a VAT-free regime. But these farms also have low production.

More than 70% of agricultural products are imported. Analyst Paata Koghuashvili believes that, in order to promote the agricultural sector, the government should eliminate property and water taxes for farmers.