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 had a high rate of economic growth, noting that in January-June it amounted to 12.8%.
“This allowed us adjusting the budget and increasing this year’s budget by 1.2 billion GEL,” Garibashvili said.
Garibashvili underlined that the government would 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 would reduce the foreign debt to 45% until 2026 and until 2030 the rate would be below 40%;
– Reducing the country’s external vulnerability. The Finance Ministry aims to reduce the current account deficit by 4% and also the share of foreign currency in total debt by 65%.
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 aimed to create an environment where unscrupulous taxpayers would not be given the opportunity to gain any kind of competitive advantage.
– Tax dispute reform. The goal is to further improve the dispute resolution system. The result of the reform will be to create a more favorable tax environment for conscientious taxpayers;
– Capital market reform. Minister Khutsishvili noted that the current tax regime in Georgia was one of the most liberal in the international arena, highlighting that the reforms would bring several important participants (investors) to the Georgian capital market.
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 and 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 and tax benefits.
Finance Minister Khutsishvili noted that in terms of budget transparency, Georgia was among the six countries in the world with a fully transparent budget index.
Finance Minister Lasha Khutsishvili also pledged the progress of improvement in investment rating, noting that it would create more possibilities for Georgia to grow the economy.
He also predicted that in the long run, GDP would double per capita. (Agenda/Business World Magazine)