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.