Importers of goods may no longer be able to use the preferential value added tax (VAT) if Georgia’s Parliament approves amendments to the country’s Tax Code.
The changes, initialed by the ruling party Georgian Dream (GD), aimed to create a competitive business environment for all types of importers.
A draft of GD-proposed amendment offered to cancel the article in the TAX Code where importers could use the preferential VAT tax if they spent more than 200 000 GEL ($116 000 USD) in VAT taxes in the past 12 months.
"Those importers which do not have [this] amount of turnover are in a less competitive environment and mostly they are small and medium-sized business representatives,” a GD spokesperson said.
Furthermore, GD believed the local businessmen who bought the goods in the local market were also in a less competitive environment, compared to importers.
GD claim importers of goods were in a better condition because they could use the preferential VAT tax while local entrepreneurs, who bought goods in local markets, did not have such preferential conditions as they had to pay VAT no matter how much their turnover was.
The draft code has already been presented to Parliament for consideration.