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Increasing Budget Tax Plan Will Hurt Medium-Term Growth - Expert

Natia Taktakishvili
06.09.21 11:30
PMCG economist Mikheil Kukava declares, that the government's tax policy, which is described in the 2022 budget, will hurt the country's economic growth in the medium term. As Kukava says, increasing the budget tax plan by 2 billion to 13 billion GEL will leave less resources for business development and investment.

"Next year, the government intends to take out 13 billion GEL in taxes from the economy. This is what really hurts our economic growth in the medium term. Collecting $ 13 billion in taxes from the post-pandemic economy will not really boost economic growth," Mikheil Kukava said.

In terms of expenditures, Kukava says that the draft plan is totally socially oriented budget.

“While some areas are shrinking compared to 2021, it is still a socially oriented budget. I find it difficult to see medium-term economic growth prospects from this budget.

The IMF calls on the government to increase inclusive economic growth and increase social spending, it means we will be locked in a vicious circle and economic growth will be hampered," Kukava said.

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