The Vice-President of the Business Association of Georgia and the President of the Wissol Group, Soso Pkhakadze, says that the association has several remarks over the new pension reform, referring to the cut of two percent of peopleís monthly incomes and saving the money on their pension accounts until the defined age.
Georgian Business Association has remarks over new pension reform
By Tea Mariamidze
Wednesday, November 8
Members of the Business Association, which is the largest Non-Governmental Organization (NGO) representing the interests of the private sector in Georgia, met with the Deputy Minister of Economy and Sustainable Development Nino Javakhadze, Deputy Minister of Finance Nikoloz Gagua, and Vice-President of the National Bank of Georgia, Archil Mestvirishvili, to discuss the reform.
The meeting took place on November 7 and was closed to the media.
Soso Pkhakadze told journalists after the meeting that the government is willing to take the Associationís views into account.
"The remarks were about how the investment board members will be appointed, how the money from the reform will be disposed etc. I think there is a high risk that this reform will not be implemented. But it has to be carried out,Ē he stated.
As Pkhakadze says, it is the third attempt to implement pension reform after one in the 1990s and another in 2011.
The Vice-President of the Business Association said the meeting participants did not talk about reducing income taxes. As for additional taxes for employees, Pkhakadze said that paying taxes into a pension budget is the social responsibility of companies.
The pension reform bill was prepared by the Ministry of Economy, Ministry of Finance and the National Bank, with the support of foreign donors, and it reads that people up to 40-years-old will be obliged to accumulate pension. People over 40 will have a choice whether to be involved or not.
The monthly input of an employed person, in both the private and public sectors, will equal two percent of their untaxed monthly salary.
Self-employed people can decide themselves whether to use the program or not. In case they want to accumulate the pension they will have to put 4 percent of their monthly incomes.
The state and the employee will provide 2 percent of the employed personís taxed salary on their pension account.
When the people reach pension age, 65 for males and 60 for females, they will have an opportunity to use the accumulated money together with the state pension, which currently equals 180 GEL.