Egg producers in Georgia say that reducing the value-added tax (VAT) on the sector could lead to lower prices for consumers. Zurab Uchumbegashvili, co-founder of the company Kumisi and head of the Poultry Development Association, told BMG that producers raised two main issues during a parliamentary price commission meeting: reducing or removing VAT and lowering cashback fees imposed by retail chains.
According to Uchumbegashvili, easing the tax burden on producers would positively affect the supply price of eggs, although the final retail price is determined by supermarkets. He noted that Georgia’s egg production is heavily dependent on imported inputs, which increases production costs.
“If VAT is reduced from the current 18% to, for example, 5%, I can promise that production prices will fall accordingly,” he said. He added that if cashback fees charged by retail chains are also reduced, producers would lower the prices at which they supply products to stores.
Uchumbegashvili pointed out that most European countries apply lower VAT rates on food products. In countries such as France, Germany, and the Czech Republic, VAT on food is typically 5–7%, while Georgia’s 18% VAT significantly increases the final price for consumers.
