Saakashvili Proposes Tax Reform

In his annual state of the nation address President Saakashvili unveiled plans to carry out tax reforms from 2008.

?We are ready to discuss the issue of reducing the profit tax from the current 20% to 15% starting from 2008. In addition, I have instructed the government to start working on combining the 12% income tax and 20% social tax, which now totals to 32%, and to reduce this combined tax to 25%,? Saakashvili said.

He said that during the past two years the government has reduced taxes by 40% and also decreased customs dues, ?but, because of the eradication of corruption and improvement of administration, tax and customs revenues have increased in the country.?
 
He also said that the government plans to set up a new independent body with the involvement of foreign arbiters for impartial adjudication of tax disputes between the state and taxpayers.
 
?We want to set up a commission that will solve tax disputes. We will invite foreign judges for this purpose. We are already working on this issue with the EU-member countries and this [commission] will have the final say in tax disputes,? the Georgian President said.

Saakashvili also noted that poverty is ?our major challenge and therefore our major task is to reduce unemployment and poverty within the next 2-3 years.?

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