Finance minister presents 10-year development plan. What does it include?

Finance Minister Khutsishvili noted that in terms of budget transparency, Georgia is among the six countries in the world with a fully transparent budget index. Photo: Georgian Finance Ministry/Facebook., 05 Aug 2021 - 19:01, Tbilisi,Georgia

Georgian Finance Minister Lasha Khutsishvili has presented his ministry’s 10-year development strategy which aims to tackle poverty and unemployment and increase overall economic well-being in Georgia. 

High economic growth should be the main focus of our economic vision for the next 10 years,” Khutsishvili stated. 

Prime Minister Irakli Garibashvili said before the presentation of the development plan that Georgia has a high rate of economic growth, noting that in January-June of 2021 it amounted to 12.8 per cent. 

This allowed us to adjust the budget and increase this year's budget by 1.2 billion GEL,” Garibashvili said. 

Garibashvili underlined that the Georgian government will start the process of reducing foreign debt this year. 

Macroeconomic stability plans and economic reforms to ensure high economic growth include:

Maintaining the fiscal sustainability of the country 

Finance Minister Khutsishvili stated that the government will reduce the foreign debt to 45 per cent by 2026 and by 2030 the rate will be below 40 per cent.

Reducing the country’s external vulnerability 

The Georgian Finance Ministry aims to reduce the current account deficit by four per cent and also the share of foreign currency in total debt by 65 per cent. 

The Finance Ministry of Georgia will implement the following Business-oriented reforms:

Growth-oriented tax policy

The Finance Ministry’s goal is to reduce the share of direct taxes in total tax revenues. 

Business-friendly tax administration

The reform envisages the simplification-cancellation of a number of transactions and operations between the Revenue Service and business operators.

Finance Minister Khutsishvili underscored that they aim to create an environment where unscrupulous taxpayers will not be given the opportunity to gain any kind of competitive advantage.

Tax dispute reform

Our goal is to further improve the dispute resolution system...The result of the reform will be to create a more favourable tax environment for conscientious taxpayers,” Khutsishvili stated. 

Capital market reform

Minister Khutsishvili noted that the current tax regime in Georgia is one of the most liberal in the international arena, highlighting that the reforms will bring several important participants (investors) to the Georgian capital market. 

Georgian Finance Ministry along with business reforms plans to implement the state-owned enterprises’ reform which includes five main directions:

  • introduction of corporate governance standard
  • commerciality
  • competition promotion in the field
  • correctly formed purpose of state-owned enterprises’ ownership/rationality of state participation in the enterprise
  • the need for a corporate purpose application document

Public financial management reforms include:

  • public investment management 
  • public finance accountability and transparency 
  • tax administration
  • public service efficiency
  • tax benefits

Finance Minister Khutsishvili noted that in terms of budget transparency, Georgia is among the six countries in the world with a fully transparent budget index.

Strategic goals of debt management include:

The debt volume in Georgia exceeded the 60 per cent mark in 2020. 

  • net debt to be reduced to 45 per cent of Gross Domestic Product (GDP) by 2026. 
  • the share of GEL in the total debt to be increased to 35 per cent.
  • non-resident investors’ share to be increased to 30 per cent.
  • maximisation of the country's development perspective with foreign loans.

Georgian Finance Minister Lasha Khutsishvili also pledged the progress of improvement in investment rating, noting that it will create more possibilities for Georgia to grow the economy. 

He also predicted that in the long run, GDP will double per capita. 

In July- August various Georgian ministries presented their 10-year development plans such as Georgian Economy Ministry, Education Ministry of Georgia, Georgian Defence Ministry and Georgian Interior Ministry.