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Hotel Business Demands Seasonal Taxation

Hotel business is waiting for the promised by the government seasonal tax for over a year, but a bill on this issue has not yet been prepared.
Seasonal taxation provides for the payment of taxes by hotels only during the active tourist season, at other times their exemption from this obligation.

For example, the hotels  located in the Black Sea resort of Kobuleti will pay taxes only in the summer, and in a winter resort of Bakuriani – respectively, in the winter.

Economy Minister Giorgi Kvirikashvili said about the possibility of the introduction of seasonal tax in November 2013 – in his words, in order to promote the hotel industry, the government is working on the introduction of such a system of taxation.

The Ministry’s  position was supported by  the Georgian Hotel and  Restaurant Federation. According to its leader Shalva Alaverdashvili, for example in mountainous regions there are hotels which operate only 3 months in a  year, but they pay taxes on the same principle as in Tbilisi, where hotels are active throughout the year.

“In the mountainous areas the hotels pay property tax for 12 months, despite the fact that it’s even impossible to live there longer than 3 months a year. The same situation is in Kobuleti, where hotels are loaded only in summer, at other times are closed. But they have to pay property tax during the year.Therefore, it is necessary to introduce a seasonal tax “- said the head of the Federation.

According to him, the National Tourism Administration should  act as an intermediary between the hotel business and the Finance Ministry in the discussion of this issue but so far it  remains inactive.

The Administration claims that at this stage work on the draft law on the seasonal taxation is suspended.

“Currently, the administration is working on a strategy for the development of tourism, which will be ready by May 2015. It will include  items relating to promotion of the hotel business, will probably envisage the issue  on the seasonal tax – though a concrete decision has not yet been made on whether such a system will be introduced, “- say in the Administration.