Some tax experts argue that now is not the right time for Georgia to cancel tax benefits in the agricultural sector. This discussion emerged after Deputy Finance Minister Giorgi Kakuradze said that some state programs may be more efficient than current tax expenditures—raising the possibility that certain agricultural tax incentives could later be redirected into targeted programs.
Zurab Dzenalashvili, founder of Tax & Legal Solutions, told BM.GE that eliminating these benefits would harm local producers, who already struggle to compete with cheaper imports. He warned that removing VAT exemptions would increase production costs, push prices higher, and make domestic products even less competitive. “The market is flooded with imports. If local produce becomes more expensive, farmers simply won’t be able to sell,” he said.
According to Dzenalashvili, while state programs are helpful, they are targeted and do not cover all farmers—unlike the current tax incentives, which apply broadly across the sector. He stressed that agriculture is one of the few sectors with real development potential, making it crucial to keep existing benefits in place.
However, he also believes the Ministry of Finance should review other tax incentives across different sectors. “There are many inefficient and distortionary tax breaks that should be reduced. Some are social and must remain, but others only disrupt competition,” he noted.
