President Saakashvili reiterated on November 13 his support to a constitutional amendment, currently under consideration in the Parliament, which, after approval, will make referendum binding in case the government decides to increase taxes (except of excise tax) or introduce new ones from late 2013.

“It will be a constitutional norm. According to the new law, it will only be possible to change taxes through constitution,” Saakashvili said.

The draft of constitutional amendment linking tax increases with the requirement of holding referendum was scheduled to be passed by the Parliament with its second reading on November 9 – more than ten months after it was adopted with its first reading.

Lawmakers, however, decided to postpone voting on the part of the draft, which particularly deals with the referendum requirement after MPs from parliamentary minority proposed to link tax increases to government’s non-confidence vote instead to referendum requirement. A senior ruling party lawmaker, Pavle Kublashvili, said he disagreed with the proposal but deemed it possible to postpone the vote in order to discuss other alternative options.

President Saakashvili again backed the referendum requirement for tax increases while speaking at a groundbreaking ceremony of ‘free tourism zone’ in Kobuleti on the Black Sea coast on November 13. 

Parliament adopted on October 26 a draft law imposing partial tax exempts for investing in construction of hotels on 11.4 hectare plot of land in Kobuleti, Adjara Autonomous Republic.

According to this law an investor, who will pour at least GEL 1 million (about USD 562,000) in construction of a hotel in Kobuleti, will enjoy with profit and property tax exempts for next 15 years.

Saakashvili said that this provision, coupled with upcoming constitutional amendment on referendum requirement, would be a strong guarantee for businesses for their long-term investment projections.