Branch Economy, Fiscal and Budget, Taxes and Incomes Committees

Branch Economy, Fiscal and Budget, Taxes and Incomes Committees

On October 16th the committees discussed modifications to the law on “State Budget of Georgia for Year 2001”.

Ministers of Finances, Economy, Industry and Trade, Tax Incomes and president of the National Bank of Georgia have presented the project of the modifications at the committee hearings. The modifications consider reduction of both budget expenses and incomes by 164,636,500 Laris.

Finance Minister Zurab Nogaideli stated that introduction of these modifications have become necessary due to failure to match requirements set by the International Monetary Fund. Next trench of the IMF would be received only if the budget would be sequestered, law on licensing would be adopted and changes would be made to the law on the National Bank of Georgia. The issue of restoration of IMF program in Georgia would be discussed by the board of directors of the Fund on October 26th. This was a reason of inviting extraordinary session of the Parliament.

Lack of planned incomes from the foreign sources and privatization processes are regarded as prime reasons of unfulfilled budget. “Deadline for application of the privatization of “Telecom” and “Elektrokavshiri” has expired yesterday. However there were no applications registered at the Ministry of State Property Management. It is hardly possible that we would be able to recover funds from these privatization processes within the year 2001″ said Zurab Nogaideli.

Minister of Taxes and Incomes Levan Dzneladze tackled the issue of the possible damage, which might be brought to the budget by adoption of the privileged system of taxation in the energy sphere by the Parliament. If the system would be introduced, current 6 million monthly income from the energy sector would reduce to 600-700 thousands within next three months.

Vano Chkhartishvili, Minister of Economy, Industry and Trade started searching reasons of budget sequestering and responsible persons in the Ministry of Taxes and Incomes. He criticized taxation policy of ex-minister Mikheil Machavariani.

The parliamentarians presume, that sequestering by 164 million Laris would not be enough and there would be necessity of 50 million more reduction at the end of the year to overcome the problems. But Finance Minister stated that he “Would not allow reduction by even one cent just to ensure that the budget report would look good”.

Vitali Khazaradze categorically demanded from the finance Ministry the list of unfulfilled points of the budget and the names of those, who should be responsible for this. “The government has made budget sequestering a common procedure. Someone must bear responsibility for this” he said.