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Finance Ministry’s Compromise Unacceptable to Beer Producers

Finance Ministry’s   compromise regarding an excise duty is not acceptable to  beer manufacturers.
According to the companies, a decision to enact 50% excise tax price increase on  malt beer instead of  tax increase in half   from   March 1 instead of January 1, cannot  be a relief for business. Manufacturers say that consultations with  the Ministry of Finance are completed and to  achieve desired results this issue will be  discussed  with Prime Minister as well.

Natakhtari company explains that  the excise tax increase will reduce the beer market, hurt producers which may be reflected  in the number of employed  and salaries. They say that an Association Agreement directives were named the main reason for  the excise tax rise; however, this agreement provides active consultations  between  the government and  business  prior to making the decision.

On January 1, the government plans to increase the excise tax on all types of alcohol, except for wine. In particular, the excise duty on 1 liter of beer will increase from GEL 0.40 to GEL 0.80.

Beer excise tax is imposed by Western countries in order to improve the accounting and not to get fiscal effect. The Chairman of the Sector Economy Committee Zurab Tkemaladze doesn’t understand why  the excise tax on beer should be imposed.

However, in his words, there are several principles of taxation. First, if the government takes a decision to limit the product because it is harmful,  for example, tobacco, alcoholic beverages. Second, if the state sees that  business is not profitable and enters the stake and the third – when luxury goods are taxed.