The United National Movement (UNM) opposition party has pledged to reduce taxes, cut bureaucracy and increase pensions if it comes into government in the October parliamentary elections.
In an economic part of its election program, unveiled on June 28, UNM says it will cut personal income tax rate from current 20% to 15% in 2017 and further to 10% within following four years.
According to its program, UNM also pledges to reduce corporate profit tax from current 15% to 10% within four years.
In May the Parliament adopted legislative amendments, according to which the corporate income tax will only apply to distributed profit starting from January, 2017. The rule will apply to banks, insurance companies, microfinance institutions and pawnbroking businesses starting from 2019.
Currently a business entity with annual turnover below GEL 30,000 is classified as “micro business”, which is exempt from tax. UNM says in its economic program that it will increase GEL 30,000 threshold to GEL 90,000, resulting in exempting more businesses from tax.
Currently a business with annual turnover below GEL 100,000 is classified as “small business”, which has to pay a turnover tax of 3-5%. UNM pledges to increase this threshold to GEL 200,000.
According to UNM’s program a taxpayer will have to register as VAT (value added tax) payer if sales during the previous consecutive 12 months exceed GEL 200,000 instead of current GEL 100,000.
UNM also pledges tax amnesty; “limiting” applying pretrial detention as a measure of restraint in alleged economic offenses, and increasing threshold from current GEL 50,000 to GEL 500,000 for qualifying a tax evasion as a criminal offense and treating such cases as administrative offense.
UNM says in its economic program that putting in place these initiatives would result into creation of 45,000 new jobs in 2017.
“In 2017 we will cut the state bureaucracy and reduce inefficient expenses by at least GEL 1 billion,” UNM said. “Economic growth achieved as a result of these initiatives is a prerequisite for increasing pensions and improving social security system.”
UNM has pledged to increase minimal monthly age pension by GEL 50 starting from November, 2016 if it wins in the October 8 parliamentary elections.
Minimal monthly age pension will increase from current GEL 160 to GEL 180 starting from July 1, 2016.