Georgian Gov’t looks to reduce tax profit, increase employment

The Government of Georgia is taking action to reduce unemployment in the country by creating more jobs, in addition to reducing tax profit in Georgia.

The country’s Economy Minister Dimitry Kumsishvili spoke about the efforts taken by the economic team to reduce tax profit, which would see some sections of society pay less tax.

We are discussing an idea to reduce profit tax. [According to this new initiative] if you do not take a dividend from your company, you do not pay profit tax meaning that you do not pay tax for the reinvested money,” said the Minister

In cases where people take a dividend from the company, it depends on the portion of the dividend to calculate how much tax profit you should pay,” he added, while speaking with a GDS journalist in the TV show 2030.

Kumsishvili said income to the state from tax profit varied from 800 million to one billion GEL. If the Government was to reduce profit tax it needed to find other sources of budget income to replace the money that would have been generated through tax profit, he explained.

Kumsishvili said it was necessary to stimulate the private sector to create more jobs and reduce unemployment.

I support the creation of jobs in the private sector [and] to achieve this goal stability is needed in the country and state budget spending should be equable,” said Kumsishvili.

He added 2015 had been an "incredibly” good year in terms of state budget expenditures, "which contributed to the creation of jobs”.

Kumsishvili expected the unemployment rate in Georgia to drop to 11 percent by the end of this year, and further fall after the new initiative was introduced.

Official statistics published in May by Geostat, the country’s national statistics office, revealed at the end of 2014 the unemployment rate in Georgia was 12.4 percent – the lowest it has been in 11 years.

The 2014 unemployment rate had dropped 2.2 percent on 2013 figures, when the country experienced 14.6 percent unemployment. Since 2006 unemployment in Georgia went from 13.6 percent, peaked in 2009 at 16.9 percent and has continuously dropped each year since then.