On May 7, the Georgian government unveiled an “anti-crisis” plan aimed at reviving the tourism sector and opening up the country for international travelers.
The government said it came up with a three-phased plan to gradually reopen the sector, with the final stage – starting from July 1 – foreseeing to reopen national borders and resume flights with major partner states.
The Government committed a fiscal package worth GEL 200 million / USD 62,5 million to undertake relief measures to shore up the tourism industry which had ground to a halt due to the pandemic.
Government’s stimulus measures include tax breaks and exemptions, direct subsidies, fiscal incentives and other support for virus-hobbled businesses operating in the tourism industry.
“We are transitioning to the third stage [of COVID-19 response], which means post-crisis management of the economy and devising plans how to kickstart different sectors… Tourism sector will be first to which emergency relief measures will apply,” stated Prime Minister Giorgi Gakharia at a meeting of the Inter-Agency Coordination Council, a government task force to combat the virus.
Three Stages of Reopening Tourism Sector
The Government said it came up with a plan to gradually ease restrictions and rev up tourism industry crippled by the COVID-19 crisis.
During the first stage, authorities are expected to help businesses implement various public health and security guidelines issued by the WHO and other international organizations.
The Government will also kick off a marketing campaign aimed at promoting Georgia as a “safe destination” in a coronavirus-stricken world.
The second stage (commencing on June 15) envisages creating special tourism zones “safe” from COVID-19 infection, and allowing travel for domestic tourism.
Third and the final stage – starting from July 1 – foresees reopening of state borders and resuming flights with major partner states.
General Relief Measures
As stated in the anti-crisis plan, all tourism-related businesses will be exempt from property tax for four months. Additionally, income tax payment will be deferred until November 1, 2020.
The Government will subsidize 80 percent of interest payments on loans of small-sized hotels for the duration of six months.
Businesses in the tourism sector can seek help from the Government to restructure their loans.
Employees who have been laid off due to the coronavirus crisis will get a monthly GEL 200 / USD 62.5 allowance for six months – GEL 1200 / USD 375 in total.
Self-employed individuals who have lost income due to COVID-19 fallout will be entitled to a one-off financial aid worth GEL 300 / USD 94.
Each company willing to preserve jobs and refraining from furloughing workers will receive state subsidies.
Employees who earn less than GEL 750 / USD 234 monthly will be exempted from the income tax.
For those who earn less than GEL 1500 / USD 469 monthly, income tax will apply to a GEL 750 / USD 234 tax base.
Supporting Hospitality Industry
Fiscal incentives for the accommodation sector (hotels, hostels, and etc.) will include waiving of property tax in 2020 entirely, as well as postponement of income tax until the end of the year.
The Government will also consider subsidizing loans of afflicted businesses in the sector.
As for the food service industry, likewise, businesses will be free of the property tax throughout the year, and can defer income tax payment until the end of 2020.
Restaurants and catering businesses could benefit from the credit-guarantee scheme supported by the state.
Travel companies will also be exempted of property tax for the rest of 2020. The State will subsidize interest payment on their loans for six months.
The Government will sponsor retraining programs for travel guides and allow them to visit museums, nature parks and other sightseeings free of charge.
The State will subsidize fees for participating in tourism fairs and marketing activities for Georgian businesses.