State Budget

Opposition Party Presents Alternative Budget to Reduce Expenditures by 1.417 billion GEL

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The opposition Movement for Liberty - European Georgia party presented an alternative 2018 State Budget in which they propose the Government of Georgia to reduce bureaucratic expenditures by 1.417 billion GEL. The party’s chairman Davit Bakradze proposed for the saved funds to be used for social projects, improvement of the country’s defence capabilities, and tax cuts. Movement for Liberty - European Georgia proposed to reduce the tax rate by 1.5% and the excise duty on fuel by 25%.

The opposition party’s estimates reductions and changes in the budget expenditures in a number of directions.

In the alternative budget, financing of various social projects will increase by 727 million GEL:

  • Increasing monthly pensions by 50 GEL for 730,000 pensioners: 440 million GEL
  • Increasing assistance for 225,000 Internally Displaced Persons by 25 GEL: 68 million GEL
  • Increasing assistance allowances for disabled persons by 50 GEL: 139 million GEL
  • Increasing funding for education by 30 million GEL. The party proposes to spend the money on increasing teachers’ salaries.
  • Assistance to families which faced agricultural and financial losses from crop damage due to the Asian Brown marmorated ‘stink bug’: 50 million GEL

The alternative budget proposes to reduce collected taxes by 415 million GEL in 2018, and to reduce tax rates gradually throughout the following years:

  • Income tax will be reduced by 1.5%, which will reduce the budget by 245 million GEL. The money from reduced income tax will remain in the pockets of the population which will indirectly increase consumer expenditure.
  • Reduce income tax to 15% by 2020.
  • Excise duty on oil products will be reduced by 25%. The state budget will be reduced by 120 million GEL. the money will be transferred from the state to the public and firms.
  • Excise duty on fuel will be halved from 2019.
  • Taxes will be canceled for small businesses (with a total turnover up to 100,000 GEL), reducing the budget by 50 million GEL.
  • From 2019, all businesses with a turnover less than 200,000 GEL will be exempt from VAT taxes.

Defense and armaments expenditure will increase by 275 million GEL.

The total value of the proposed initiatives is 1,417,000,000 GEL.
The proposed budget plans to fund the social initiatives by reducing spending in other directions:

  • Bureaucracy cuts in the government structures: 54 million GEL.
  • Reducing financing of legal entities under Public law and non-productive legal entities by 25%: 240 million GEL.
  • Revocation of the ‘financial police’: 18.4 million GEL.
  • Increasing the efficiency of the Ministry of Infrastructure using the same budget amount of 2017, by eliminating corruption and holding a transparent system for tenders: 557 million GEL.
  • Abolition of ineffective programs: 445 million GEL.
  • Keeping the government reserve fund at the 2017 budget level: 10 million GEL.
  • Reduction of other costs: 26.2 million GEL.

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