2020-03-13
Giorgi Gakharia, Prime Minister of Georgia together with his Economic Team held a briefing to present a specific Plan of Economic Incentives. It includes the following measures and their implementation is expected to create additional financial resources of 1 BLN GEL in the economy of the country and namely:
1. Businesses that will encounter problems in servicing their loans will get their liabilities restructured by commercial banks on an individual basis. Hotel industry only will see around 100 MLN GEL liberated as a result of the indicated process;
2. Besides, citizens who are willing to deter their loan repayment will be given such opportunity by commercial banks in the coming three months;
3. Companies that operate in the tourism industry: hotels and restaurants, travel agencies, passenger transportation companies, site seeing companies, arts and sports event organizers, etc. will get their property and personal income taxes deterred by the Government of Georgia for the coming 4 months (Due Date for the latter being November 1, 2020). Hence, tax incentives will apply to 18 000 employers and over 50 000 employees. It means that over 100 MLN GEL will remain in this sector of the economy;
4. In addition, Government of Georgia will double the volume of VAT refunds to companies with an aim of supplying them with working capital and instead of 600 MLN GEL originally intended by the Ministry of Finance of Georgia (MOF) 1.2 BLN GEL (by 600 MLN GEL more) will be refunded by the end of the year;
5. Tailor-made State Program will be designed to co-finance the interest payment on bank loan borrowings by hotels with 4-50 rooms throughout the country for the coming 6 months. This project will apply to about 2000 hotels operating in the country, which might have otherwise run into significant financial losses as a result of the pandemic;
6. Apart from all the above-mentioned, State will augment its support towards capital expenditure (CapEx) projects with an aim of providing additional economic incentives. Hence, CapEx envisaged in the State Budget of Georgia for 2020 will be increased by 300 MLN GEL.
It is worth noting that Government of Georgia is already working towards optimizing the banking regulations, which will create an additional incentive for facilitating the economic performance in the country.
Also, negotiations with International Financial Institutions (IFIs) have already been started for soliciting financial resources from their special allocations.
Press Service of the Government Administration