On July 3 the preferential tax regime came into force with the aim to promote small entrepreneurship. The new tax regime will be applied to about 120 000 physical entrepreneurs.
According to the new initiative, the small business status will be conferred to entrepreneurs, whose consolidated annual revenues are about 500 000 GEL, instead of previous 100 000 GEL, Prime Minister Mamuka Bakhtadze said.
Moreover, the taxable income of small business is taxed by 1% rate instead of previous 5%.
“we plan to establish new fair rules of the game in national economy. This economic model will be oriented on defeating the key challenges with the aim to eradicate poverty in Georgia for ever. Our economic team has inherited the system, when sometimes taxes for small business were higher.
Moreover, small entrepreneurs used to face barriers and could not expand business. All these factors forced entrepreneurs to operate in shadow economy. A sole way for poverty reduction consists in small business promotion. Today, we have put into effect an unique tax regime and our parliament has backed this initiative.
The new tax infinitive is to minimize tax burden on entrepreneurs. Our citizens are able to enjoy this regime. Moreover, the regime will ensure the sector transparency. The unique tax regime came into force today. Our objective is to attain inclusive growth. We prioritize to grow the ratio of small and medium business in economy”, Bakhtadze noted at the briefing.