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Giorgi Gakharia
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Regulations on Beer and Tobacco To Be Revised

The new regulations were actively blamed by the business sector in due time.

Business ombudsman and member of the economic board Giorgi Gakharia appraises the regulations as less efficient. Beer excise and Ad Valorem tax on tobacco may be revised, Giorgi Gakharia told the iPress.

The private sector and associations and business unions have been openly and actively protesting against the new regulations that hinder the business sector development. The EU regulations oblige Georgia to carry out various reforms, but does Georgia introduce there regulations in proper way?

Enterprises have expressed their discontent with a rise in excise rate. Despite these protests the beer excise rate increased on March 1 and today enterprisers complain about the decreased sales.

The Finance Ministry refers to the EU requirements to substantiate a rise in beer excise rate. However, today the government discusses revising the mentioned regulations. Giorgi Gakharia presumes that the increased excise tax rate could negatively affect both the state budget and the business sector.

The business ombudsman also casts doubt on appropriateness of introduction of AD Valorem tax on tobacco. Many EU countries have abolished this regulation, while in Georgia AD Valorem tax was enacted on July 1.

Amendments to the tax code calls for imposing additional excise on tobacco products (filtered and unfiltered cigarette) – 5% of the retail price.

“Tobacco taxes will increase, but the conditions should be comfortable and affordable for the business. This issue should be revised. AD Valorem tax introduction was not the best solution. EU countries are reported to be restricting and then entirely removing Ad Valorem tax. The Finance Ministry introduced arguments on the issue, but I believe the issue should be further polished. We keep working with Finance Ministry”, Giorgi Gakharia noted.