The new government will not lower 20% personal income tax from next year, instead it plans to introduce minimum untaxed system setting annual income threshold at GEL 6,000.
Currently the tax code says that personal income tax should go down from current 20% to 18% starting from next year and further to 15% starting from 2014, but the new government plans to amend this law.
The previous government initially was also planning to drop income tax cut plan from next year, instead offering introduction of “voluntary personal savings system”; the proposal was even passed by the Parliament with its first and second readings, but then the proposal was shelved and not even voted in the Parliament with its final reading.
The new government plans to refund 20% personal income tax for those employees, whose annual salary is GEL 6,000 or less.
According to MP Davit Onoprishvili, who chairs parliamentary committee for budget and finances, under the proposal if an employee has a monthly salary of GEL 500 (GEL 6,000 annually) or less, 20% of it will still be deducted as an income tax in 2013, but an employee will be able to get refund (in this case GEL 1,200) in 2014 upon submitting declaration to the tax authority.
Draft 2013 state budget submitted to the Parliament by the new government targets tax revenues to be GEL 6.92 billion next year of which GEL 1.805 billion is projected to be from personal income tax.
It is projected that in 2014 the state budget will have to allocate about GEL 200 million to refund income tax for those falling under the category of untaxed minimum wage, MP Onoprishvili told Civil.ge.