Baku, Azerbaijan, May 15
Trend:
Georgia has to achieve economic growth due to greater contribution to small and medium businesses, said Mamuka Bakhtadze, Prime Minister of Georgia, Trend reports via Sputnik Georgia.
"Unfortunately, the number of such enterprises in the structure of Georgian economy is not enough. Our goal is to promote small and medium-sized enterprises. We need to offer them more tax initiatives,” he said.
In March 2019 the real economic growth in Georgia, according to preliminary data, was 6 percent compared to the same period in 2018, as stated by the National Statistics Service. Growth in 1Q2019 was 4.7 percent in comparison with the same period in 2018.
One of the main conditions for supporting small and medium enterprises is the program launched in the spring of this year, when the Georgian government acts as a guarantor for banks to get a loan for those businessmen who do not have property to pledge to the bank.
The amount of the guarantee will be 70 percent of the loan, but not more than 10 percent of the total volume of loans secured by the guarantee. For this, the state budget of Georgia provides for 20 million lari (about $7.3 million).
“One of the recent initiatives is the so-called loan guarantees that will help small and medium enterprises, so that finances are more accessible to them and they can expand their business,” said Bakhtadze.
In his opinion, this will help enterprises to bring under new markets.
To obtain the status of a small business in Georgia, it is necessary to register with the Revenue Service. If the person is an individual entrepreneur, he must first register with the National Agency of Public Registry.
The status of small business in Georgia is awarded to individuals, whose income for the calendar year is up to 500 thousand lari (more than $203,000). Moreover, if income increases, the person will retain the status of small business over the next 2 years.
The preferential tax regime for small businesses began to operate from July 1, 2018, according to which the turnover tax would be 1 percent instead of 5 percent.
According to the World Bank report, Georgia in the Doing Business-2019 rating, which assesses the degree of ease of doing business, is ranked sixth out of 190 countries.