Georgia opposition sets out plan to cut prices
Georgia opposition on cutting prices
Georgia’s opposition alliance has unveiled a rapid economic response plan to tackle rising prices and urged the government to cut the tax burden immediately. The initiative proposes halving excise duty on fuel, as well as reducing VAT and income tax by one percentage point to bring prices down.
Call for urgent economic intervention
The proposed plan centres on a set of swift and direct measures. The alliance is calling for a halving of excise duty on fuel, alongside a one percentage point cut in both income tax and value added tax (VAT). It also proposes reducing profit tax and dividend tax by one percentage point.
According to the opposition, these changes would leave around 1.6bn lari in the economy, keeping more money in citizens’ pockets and easing the pressure of rising prices. The measures are also expected to lower fuel prices by about 20 tetri, with a knock-on effect in slowing the rise in prices for other goods and services.
At present, Georgia’s flat income tax rate stands at 20%, VAT at 18%, profit tax at 15%, and dividend tax at 5%.
Criticism of systemic problems
In its statement, the alliance also sharply criticises the government’s economic policy. Opposition parties argue that rising prices are driven not only by global factors, but also by domestic policies, including corruption, a heavy tax and regulatory burden, and weak institutions.
They say the National Bank is politicised, the judiciary lacks genuine independence, and the budget serves the interests of the ruling group. This environment, they argue, reduces investment and raises costs for businesses, ultimately affecting consumers.
Comparison with international practice
The opposition says that, during the global energy crisis, a number of European countries sought to shield their populations by cutting taxes. It points to Germany, France, Italy, Spain and Sweden as examples. By contrast, it argues that Georgia has not adopted a similar approach, as the government views high taxes as an easy way to boost budget revenues.
Key factors
The opposition alliance identifies several main drivers behind rising prices:
- Higher tax burden
- Sharp increase in money supply
- Growing domestic debt
- Decline in foreign investment
- Higher excise duties on energy
- Corruption and bureaucratic costs
Taken together, these factors, the alliance says, are fuelling sustained price increases and worsening the economic situation for the population.
Long-term outlook
In the longer term, the opposition is calling for a revision of the economic model. Its plan includes reducing the tax and bureaucratic burden, stabilising domestic debt, depoliticising the National Bank, and establishing an independent judiciary.
It also calls for curbing corruption and deepening integration with developed markets, which it says would help boost foreign investment.
Proposal for budget reallocation
The initiative also предусматривает internal budget restructuring. The opposition proposes cutting “other spending”, subsidies and administrative costs, and using the savings — estimated at around 1.6bn lari — to fund tax relief.
It says these cuts would not affect wages, or spending on defence and security.
According to the opposition, such reallocation would allow the tax measures to be implemented without adding pressure on the budget, while leaving more resources in the wider economy.
Georgia opposition on cutting prices
