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29.Oct .2020 12:45

“The Horeca Sector Owes 20–25 Million GEL to Distributors” – What Does the Business Ask the Government?

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The Horeca sector has accumulated an average debt of 20-25 million GEL to distribution companies. Due to the uncollected tens of millions of GEL, the manufacturing and distribution companies were left with no working capital.
 
According to Iva Chkonia, President at Georgian Distributors Business Association (GDBA), the sector understands the crisis. Still, they consider it wrong to extend the government's assistance only to the tourism sector. Iva Chkonia says the distribution business needs tax breaks for the sector to be able to maintain liquidity.
 
"We are talking about tens of millions of collapsed funds, the revival of which seems impossible. What does this mean, and what is the problem for the manufacturer and distribution company? There is a deficit in working capital. It isn't easy to meet the supplier's obligations on the one hand and the local manufacturer on the other.
 
We understand the problems of the Horeca sector. 90% of the sector has stopped working. It does not make sense to demand anything from them. Therefore, we addressed the relevant problem to the state. The distribution sector is directly linked to Horeca. When we say that the relevant sectors need help, we are no different. Restoring Horeca's activities without us in the future is unthinkable. We demand a temporary abolition of taxes, even in terms of income benefits that we have had so far.
 
I understand that VAT exemption is not considered, but to increase the liquidity of the distribution business, it is important that VAT is tied to the sale of products or, in the worst case, VAT is paid 30 days after import, which was the practice before," said Iva Chkonia.
Whether the government will take into account the crisis in the distribution business is still unknown.