26.Sep .2022 18:00

The Budget To Include 350 MLN More VAT This Year Due To Increased Inflation

The Budget To Include 350 MLN More VAT This Year Due To Increased Inflation
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Giorgi Kakauridze, the Deputy Minister of Finance declares, the state budget will receive GEL 350 million more VAT this year due to the high inflation in the country. The point is that 18% of the prices of goods and services sold in the country comes from Value Added Tax. If a company or store increases the price of its product, the amount of VAT also increases.

According to the original budget of 2022, the government planned to collect GEL 5.4 billion of VAT this year. However, according to the revised budget, this tax plan increases by GEL 530 million. As of Giorgi Kakauridze, inflation is the main determinant of growth.

"Profit and excise taxes currently have no impact on inflation. A tax that is affected by inflation is the value added tax. VAT increases by approximately GEL 530 million, and the share of inflation is approximately GEL 350 million," said Deputy Minister of Finance Giorgi Kakauridze.

MP Aleksandre Rakviashvili asked the question of the contribution of inflation to the value added tax to the Deputy Minister of Finance.

Overall, in the 2022 budget, the tax plan increased by GEL 1 billion and reached GEL 14.5 billion.

How the budget tax plan changes:

• VAT - GEL 5.8 billion, an increase of 428 million, growth of 8%;
• Income tax - GEL 4.6 billion, an increase of GEL 291 million, growth e of 7%;
• Profit tax - GEl 1.8 billion, an increase of GEL 209 million, growth of 13%;
• Excise duty - GEL 2 billion, an increase of GEL 95 million, growth of 5%.