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Saakashvili Comments on Tax Reform

President Saakashvili said on May 27 that a new tax reform proposal should be thoroughly scrutinized to prevent it becoming an unnecessary burden for private sector employees.

The government has proposed as part of, what Saakashvili calls, ?radical tax reforms,? to reduce profit tax from the current 20% to 15% and to combine the 12% income tax and 20% social tax. 

It means that starting from 2008 the average-weighted rate of combined tax will reduce by 2%.

Some opposition politicians, however, ? including MP Zurab Tkemaladze, leader of Industrialist Party and Davit Usupashvili, leader of Republican Party ? have warned that the proposal may adversely affect private sector workers. They currently pay 12% income tax, but will have to pay 25% after income and social taxes are combined.

?I want us to thoroughly examine this [proposal]. Combined tax is aimed at making your life easer, but at the same time this new tax should not make your employees’ lives more difficult. So we should thoroughly study it in order to avoid any gaffes,? Saakashvili told a group of businessmen on May 27.

Saakashvili was speaking at a fundraising dinner in Tbilisi. The event has reportedly raised USD 164,000 for reconstruction of a museum of Ilia Chavchavadze, a 19th century Georgian writer and public figure.

The president also told the businessmen that the idea in itself to reduce taxes was good, ?but we should further scrutinize this idea together with you; the idea is ? simple and low taxes.?

This post is also available in: ქართული (Georgian) Русский (Russian)


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