Georgian Prime Minister Irakli Garibashvili said at a government meeting that the pensions of former policemen and soldiers will increase to GEL 1,000 [about $370] in 2024, as Georgia will receive an additional 300 million GEL [about $110 million] from the banking and financial sector in 2024.
On pensions of former policemen and soldiers
“We have made a decision that former police officers, soldiers, members of security forces will receive increased pensions. Until today the maximum pension amount was 560 GEL [about $206] and now it will increase to 1,000 GEL [about $370]. Also, on average, the amount accrued for each year of service will increase by 20 percent. We want to express our gratitude to our law enforcement agencies. This will be a decent pension, which we intend to gradually increase every year, depending on our income.”
According to Irakli Garibashvili, from 2024 the gaming business will be taxed at a rate of 15 percent on profits instead of the current 10 percent. The withdrawal fee is also changing from two percent to five percent. The government presented amendments to the tax code to the parliamentary majority. According to the prime minister, 400 million GEL [about $147 million] will go to the budget due to the changes.
“Here, on the one hand, I would like to express surprise, and on the other hand, it is very sad that the turnover of the gaming business is growing. I would like to inform you that in 2022, the entire turnover of the gaming business increased from GEL 48 billion to GEL 52 billion [about $17.7 billion to $19.1 billion], which is a disastrous figure. So many people are still involved in the gaming business.
You know that last year we made significant changes when we banned advertising and also restricted access to gambling until the age of 25, so automatically 1.5 million citizens were restricted from participating in the gambling business. Despite this, quite a large number of citizens are engaged in the gaming business. Accordingly, we decided to raise taxes on this business. As I have already told you, in 2024 another 400 million GEL will go to the budget.”
The Georgian government strictly regulates the gambling business. According to Georgian legislation, the right of gambling companies to place advertisements has been restricted completely, and age restrictions on access to gambling for citizens – no one under 25 years old.
Despite the restrictions, the gambling industry in Georgia has been growing rapidly in recent years.
According to the Prime Minister, the figure has increased from 48 billion to 52 billion [about $17.7 billion to $19.1 billion] in 2022. In addition, according to the National Statistics Service, the total turnover of the gaming business in 2017 amounted to GEL 6 billion [about $2.2 billion] , in 2020 – GEL 32.1 billion [about $11.8 billion].
300 million GEL [about $110 million] from the banking and financial sector
According to Irakli Garibashvili, this is how much the banking and financial sector will add to the budget next year.
“During the budget review process, additional needs were identified. During this period, emphasis was placed on mobilization of additional resources. Having analyzed the current trends in the banking sector for nine months, it turned out that in 2024 we can get an additional GEL 300 million in revenue from the banking and financial sector. […] And in the next one we will see what additional resources can be found here,” Garibashvili said.
In 2016, the Georgian Parliament introduced the “Estonian model” in the tax system, the implementation of the reform started on January 1, 2017. The purpose of introducing the “Estonian model” was to accelerate economic growth.
This model means that a company is taxed only if the profit leaves the company. If the profit stays within the company, the company does not pay income tax. Thus, the money that has been accumulated stays with the company to expand its business.
According to the head of the government, today the government will send a revised version of the budget for 2024 to the parliament. The country’s budget for next year is set at 28 billion 500 million GEL.
According to the amendments made to the draft budget, next year pensioners with chronic diseases will receive medical drugs free of charge. In addition, according to Garibashvili, funding for early research of cancer patients will also begin.
“Next year, pensioners with chronic diseases will receive medicines for free throughout the year. There are about 400 thousand such pensioners. We will maintain this trend.”
