On 11 November today, Prime Minister of Georgia Grigol Mgaloblishvili unveiled a new Government decision in the building of Tbilisi City Hall. As Grigol Mgaloblishvili said, from 2009 income tax will drop from 25 to 20%. According to the pledge that the Government gave under the 50-month program, the income tax reduction was supposed to be a 5-year process to make just 1-2% a year. This meant that income tax rate would come down to 20% only in 2011. Dividend tax will also be reduced by 50% from 10 to 5%. Under the 50-month program, the tax would drop to this point only 2010.
According to the Prime Minister, all that has been destroyed by the war has to be restored. The world is enmeshed with a severe economic crisis. "But number one task for us is to create new jobs. This involves formation of additional incentives to business. For this purpose, I asked the Parliament of Georgia to give us 15 days more to work on the draft budget to make sure it is better and better responds to the current needs of the society.
Together with our economic team, I am working hard on new initiatives. This is going to be a few series of new initiatives. At the same time, it is critically important that I meet with people as often as possible to know what their demands are so as to reflect them in the budget, to know how to we should meet the needs of our people.
I'd like to unveil before you a very important initiative, on which we made a decision today - it's about lowering income tax. It has been the result of very intensive consultations. We decided to reduce the tax right from 2009 from 25 to 20% and also to cut dividend tax by 50% from 10 to 5%.
What does this mean for us? We all know this well. This means an additional 250 mln Lari in the Georgian economy. This means that the entire Georgian society will enjoy increased savings. I believe that this is the best precondition for the creation of additional jobs. The initiative will benefit invariably all the citizens of Georgia who earn salaries and are employed - their income will grow. Those who earn 535 Lari in salary and pay 134 Lari in income tax will now pay 27 Lari less.
Yesterday, I met with teachers and was surprised to learn that one of their most pressing problems, in addition to the destruction of schools and growth of salaries, was tax reduction. Teachers who earn a 200-Lari salary will pay 12 Lari less in taxes. The Government is continuing its works on new economic initiatives and we'll let you know about them," the Prime Minister of Georgia said.
Press Center of the Chancellery of the Government of Georgia