Gov’t Writes off Financial Obligations of up to GEL6 Million

By Natalia Kochiashvili

Wednesday, October 13

The government has made another decision to support the citizens, businesses, and entrepreneurs affected by the pandemic.

Back in March Turnava announced that the government would provide benefits to the companies that bought state property on various terms and were unable to pay fees and fulfill investment conditions due to the pandemic, as well as those who leased state property and accumulated rent taxes.

The government has decided that the business sector and citizens will be forgiven for a 1-year tax on state property leases. Business entities and individuals who use state property lease, rent, or management rights and have transferred state property from March 21, 2020, to March 21, 2021, will be forgiven rent and rent taxes, as well as fines, sanctions, or penalties due for non-payment or late payment, accrued during this period. The decision was made at Monday’s government session, after which the Minister of Economy and Sustainable Development of Georgia Natia Turnava informed about it.

As Turnava noted, we are talking about more than GEL5 million, and an additional GEL1 million consisting of the fines on non-payment or delay. In particular, a total of 1 652 entities were required to pay GEL 5 071 875 in the mentioned period and $100 608 for the use of state property.

Benefits apply to legal entities and individuals who use state property lease, lease, or management rights to state-owned property, as well as those who have a contract with the Property Management Agency. The Parliament of Georgia discussed this issue and adopted relevant amendments to the Law on State Property. Based on these changes, the government has prepared this special rule.

The economy minister explained that the decision comes amidst the current difficulties faced by the country, businesses, and people, which is reflected in their solvency. This hindered the ability of the tenants to use the same state property, to pay the rent levied in favor of the state on time and the fines were imposed. The reason for that was pandemic-related regulations and a closed economy.

“Already in the spring of this year, after March, we decided to open the economy, after which similar problems were eliminated. It would be quite fair that due to the pandemic, when businesses were limited, it was the most difficult period, we gave relief and opportunity to people, companies who used to rent - forgive them this unpaid amount,” Turnava said.

She added that to ensure equal distribution of the benefit, entities who have already paid the taxes in full or in part will enjoy new tax breaks during the next payment period, "which is fair because everyone suffered from the Covid-19 crisis equally."

Asked whether the launch of the Business Facilitation Mechanism 2 weeks before the second tour of local elections is related to the elections, the minister explained that the law was adopted by the Parliament on June 9, 2021, and the law instructed the Ministry of Economy to develop this rule.