Budgetary Amendments Unveiled

Initial target of tax revenues will be reduced by GEL 500 million, according to the draft amendments to the 2009 state budget submitted to the parliament by the government.

The same draft also envisages increase of expenditures by GEL 312 million mainly at the expense of planned issuing of GEL 260 million treasury bills on the domestic market and of credits from the World Bank and the Asian Development Bank.

Initially planned revenues from income tax will be revised and reduced by GEL 25 million, according to the draft amendments; revenues from profit tax will be reduced by GEL 83; value added tax by GEL 314 million; excise tax by GEL 68 million; customs duty by GEL 8 million and other taxes by GEL 2 million.

The draft of amendments, if approved, will cut funding for some of the ministries and state agencies, including for the Ministry of Defense by GEL 45 million. The latter’s current funding stands at GEL 950 million.

Other agencies, which will face funding cut, are: Ministry of Regional Development and Infrastructure – by GEL 9.5 million; Finance Ministry – GEL 4.0 million; Ministry of Environment Protection – GEL 3.6 million; the president’s administration – GEL 1.7 million; the government’s administration – GEL 1.0 million; Foreign Ministry – GEL 650,000; Ministry of Culture, Protection of Monument and Sports – GEL 140,000.

But if approved, the amendments will increase funding of some other agencies, including: the Tbilisi municipality by GEL 69.4 million and Ministry of Labor, Healthcare and Social Protection by GEL 38.5 million for financing of social and healthcare programs.
 
Ministry of Refugees and Accommodation will receive additional GEL 16.3 million; GEL 9.2 million out of this sum will be spent on granting compensations to the victims of the August war, while GEL 4.2 million will be spent on communal expenses of these people.

GEL 20.0 million will be allocated for construction/rehabilitation of public schools, according to the draft.

According to the government’s “explanatory note”, attached to the amendments, “the world economic crisis” and “instability inside the country” have become the reason of expected economy contraction by 1.5%, instead of initially forecasted 2.5% growth.

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