Finance Minister Calls for Adoption of New Tax Code by September

Georgian Finance Minister Zurab Noghaideli said today that the final presentation of the new tax code will take place next week.

?We want the Parliament of Georgia to adopt the new tax code by September, so as to develop the budget for 2005 on the basis of the new taxation system,? the Finance Minister said at a session of the Parliament Committee for Budget and Finance on August 6. 

He also said, that the International Monetary Fund (IMF) also supports the key parameters of the new tax code.

?However, I do not agree with the proposal by the IMF Mission to adopt the code gradually within 3 years,? Zurab Noghaideli added.

The IMF Mission, led by Paulo Neuhaus, arrived in Georgia on July 23 and discussed the current fiscal situation in the country during a two week stay. 

According to the new tax code, only 9 out of 21 taxes will remain in force. The rates of some of the taxes will also be reduced as well. In particular, the social tax will be reduced to 20% from 33%; income tax ? from 20% to 12%, value added tax ? from 20% to 18%. The profit tax, however, will remain at 20%.

The new tax code is scheduled to be enforced starting in 2005. However, the government intends to test the new system earlier and begin the enforcement of the social and income taxes, 20% and 12% respectively, as early as November 2004.