"Tax break seems to have a social effect, but the rich often enjoy them," First Deputy Finance Minister Giorgi Kakauridze said in response to BMG's question.
The Ministry of Finance has published a document on the assessment of tax break from which it is gathered that as a result of dozens of benefits in the country as a whole, GEL 2.7 billion of taxes are not included in the state budget. According to Giorgi Kakauridze, the government will assess the objectives and effectiveness of these benefits and after that, appropriate decisions will be made together with the parliament.
According to Kakauridze, in many cases wealthy individuals and rich corporations also enjoy the tax break.
"It is quite a large amount, over GEL 2.7 billion, it is about 4.4% of the GDP. We analyzed the largest directions, which are health care, agriculture, education, which is about half of the total expenditure. There is also a very large share of benefits related to other sectors, including indirect trade.
The next level will be to assess how effective the competitive tax break is in terms of cost-benefit for each sector. We will also consider the purpose of this benefit. It is a social goal.
Very often it happens that the benefit seems to have a social effect, and more often, the rich or wealthy companies use this benefit.
This is not only the practice of Georgia, there is such a practice of using expenses all over the world. That's why we think that it is more appropriate if we want to help any program, then it should be subsidized in a targeted way, and not that it should be a benefit for everyone," says Giorgi Kakauridze.