Georgia’s leasing sector is calling for changes to property tax rules, arguing that the current system places leasing companies at a competitive disadvantage compared with banks and individuals. Kote Sulamanidze, CEO of BB Leasing, said the sector is subject to different taxation rules in some areas, creating additional costs for leasing companies.
“Leasing companies are unfortunately not in an equal position when it comes to property tax. The new regulation concerning changes to property taxation will also have a negative impact on leasing companies to some extent,” Sulamanidze told “Business Course.”
He said individuals with annual incomes of up to GEL 100,000 will no longer be subject to property tax, including when they own a vehicle. However, when the same vehicle is acquired through leasing, the leasing company is required to pay the property tax. “This creates an unequal competitive environment with banks because an additional cost arises, which is passed on to the customer, and this does not work well for leasing companies,” Sulamanidze said.
According to Sulamanidze, the sector is negotiating the issue with the Ministry of Finance, while market participants have also formally appealed to Parliament. “We have requested that the property tax be changed and adjusted to a healthy environment. We are discussing this with the Ministry of Finance and have also sent a letter to Parliament on behalf of the association. We expect the issue to be considered and hope to achieve a result, although the process has taken quite a long time,” he said.
