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Tax code changes come into force

By M. Alkhazashvili
(Translated by Diana Dundua)
Monday, January 14
As of January 1, Georgians have a new set of taxes to pay.

The changes abolish the 20 percent social tax paid by employers, and increase personal income tax from 12 percent to a flat 25 percent.

However, government officials say that over the next five years income tax will decrease to 15 percent, according to the newspaper Rezonansi.

The government also claims that the tax changes should not have any real effect on wage-earners, as employers will be able to offer higher salaries now that they are freed from the burden of social tax. On the other hand, analysts say that employees are hardly guaranteed raises.

“Salary increases depend on the goodwill of the employer, and if they do not wish to increase salaries, employees will receive less, overall, than they did before the tax code changes,” the newspaper Rezonansi quoted economist Demur Giorkhelidze as saying.

Prime Minister Lado Gurgenidze said that the government will discuss lowering the income tax over the next two months.