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Colliers International Georgia: Imposition of VAT Tax on Advance Payment Cannot Foster Business Development

“In practice, Government offers private sector to lend money to state budget in advance without any benefits in exchange, while private sector will have to take loans to finance their financial needs”, Irakli Kilauridze, director of Colliers International Georgia, told Business Contract  concerning the new bill of amendments to Tax Code.

The new regulation resembles an unjust deal that cannot develop business sector. This amendment has become a certain surprise for companies that had launched long-term projects.

Meanwhile Ministry of Finance refuses a lack of contacts with business sector. Deputy Finance Minister Nikoloz Gagua told Business Contract that preliminary coordination was arranged with private sector over the issue.

“It would be better if the bill concern the coming projects, not the launched projects. Any law concerning business sector should be introduced correctly and consecutively. There is no private sector that would welcome a rise in taxes.

This is an unjust deal, in practice. On the one hand, Government borrows money form private sector. As a result, expenditures grow in private sector. This decision cannot foster business development”, Kilauridze said.