Home / Business / Importers Talk about Negative Consequences of the Abolition of Benefits

Importers Talk about Negative Consequences of the Abolition of Benefits

Georgian importers analyze the negative effects of the recent decision by the country’s Parliament to abolish the preferential tax treatment in terms of VAT.

According to  CEO  of GD-Holding Uta Maziashvili, importers’ turnover  has reduced in recent months because of the new law.
“Cancellation of benefits has not led to a reduction in imports, but the importers have to take loans from banks to provide the required turnover- and it means  the additional costs, and in general, the larger the loan  the worse. The changes affected not only the major importers, but also small and medium, as they have less access to finance than that large importers and it will be even harder for them to borrow, “- the businessman notes.

According to the head of one of the small companies Otar Putkaradze, his business has not suffered, although he  does not deny that “the old rule was better.”

At the same time, Director  of  Sharm Trading company Vakhtang Sadzaglishvili says  the company is working normally, and a new rate of VAT payments has not affected  its activities.

On June 1, the major importers can no longer use  VAT preferential treatment.

One of the initiators of this decision, the  MP from the ruling majority Gogi Topadze states “Commersant”  that an abolition of benefits for importers with an annual turnover of more than  200 000 GEL puts in an equal situation both importers and local manufacturers who do not have such a high turnover.

“Preferential treatment consisted in the fact that large importers could use the deferred payment of VAT for a few months. For example, if the Georgian company buys tobacco abroad, it has benefits, and if buys from local producers – no “- he says.

The law was passed by the Parliament of Georgia on April 25 upon the initiative of the Ministry of Finance.