14.Jul .2021 12:30

Everything That Changes In The Budget 2021

Everything That Changes In The Budget 2021
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Parliament will consider amendments to the Budget 2021. The government's budget spending will increase by an additional 1.1 billion GEL and it will reach 19.5 billion GEL instead of 18.4 billion GEL.

According to the government, the need for budget adjustment is due to higher-than-expected economic activity in the country. As of the new forecast, the economic growth will be 7.7% instead of 4.3% this year. Given that, the government is growing the forecast for tax revenue by 720 million GEL. The increase will affect income, excise, VAT and import taxes.

Due to higher-than-expected economic growth, Georgia's GDP is expected to reach 57.2 billion GEL. With this in mind, the volume of public debt will be reduced to 54% of GDP.

Funding increases in a number of ministries:

Ministry of Health - increase of 600 million GEL, total budget will be 6.1 billion GEL

The largest amount among the ministries - 600 million GEL is added to the Ministry of Health, which the budget will reach 6.1 billion GEL. Including budget for treatment of COVID-19 patients will increase by 446 million GEL and will amount 846 million GEL. 150 million GEL is provided for the direct purchase of vaccines.

Ministry of Economy and Sustainable Development - 36 million increase GEL, total budget will be GEL 643 million

The budget of the National Tourism Administration within the Ministry of Economy will be increased by 10 million GEL to 17.7 million GEL. The estimated costs for organizing mandatory quarantine will be reduced by 29 million GEL. In return, the funding of the agency Enterprise Georgia will increase by 55 million GEL and it will reach 357 million GEL.

Ministry of Environment Protection and Agriculture - increase of 177 million GEL, total budget of 628.6 million GEL
The increase in the agency budget is mainly related to the vintage subsidy program. The budget of the Ministry will increase by 100 million GEL in this direction and reach a record 138 million GEL.

Funding for the unified agro-project will also increase by 74 million GEL, as a result of which the total budget of the program will reach 280.7 million GEL.

Ministry of Infrastructure - increase of 90 million GEL, total budget of 2.45 billion GEL

According to the budget explanatory note, the additional funds are mainly provided to finance the state program "Renovated Regions". In total, with this project, the government will consider spending up to 500 million over a 4-year period. Tenders worth 300 million GEL have already been completed, which provides the implementation of projects in different regions (facades, squares, etc.). In parallel with the allocation of funds for the renovated regions, the road maintenance budget will be reduced by 30 million GEL and it will be set at 641 million GEL. The budget for the construction of the highway will increase by 37 million and reach 890 million GEL.

Ministry of Defense - increase of 30 million GEL, total budget will be 930 million GEL

The increase is intended to ensure the smooth implementation of the remuneration of employees of the Ministry of Defense and other logistical measures.

Ministry of Justice - increase of 60 million GEL, total budget will be 296.5 million GEL

Assignments increase by 60.0 million GEL compared to the original plan of 2021 and amount to 296.5 million GEL, which is due to the increase in funding for state representation in international arbitrations and international courts.

Despite the separation of the Ministries of Education and Culture, they are still represented in the budget as one agency, their total budget will increase by 74.6 million GEL and will reach 1.87 billion GEL.

Including, funding for education will increase by 40.0 million GEL, while the rest will increase in the field of culture and sports.

Central Election Commission (CEC) – the budget will increase by 4.2 million GEL and reach 74.5 million GEL.

The budgets of other agencies remain unchanged.

According to the draft budget, the government is not considering reducing bureaucratic expenditures at all. If under the current budget law the salary fund of public servants has been set at 1.61 billion GEL, it will now increase to 1.64 billion GEL.

As for the budget revenues, the volume of taxes will increase by 720 million GEL to 11.06 billion GEL.

In more detail, the tax increase plan is as follows:

• VAT - increase 399 million GEL, updated forecast for 2021 - 4.74 billion GEL;
• Excise tax - increase of 218 million GEL, updated forecast for 2021 - 1.8 billion GEL;
• Income tax - increase of 90 million GEL, updated forecast for 2021 - 3.4 billion GEL;
• Import tax - increase of 3 million GEL, updated forecast for 2021 - 80 million GEL.