“Budget Gets Infused without Strict Administrative Enforcement”
14 March, 2013
“Budget Gets Infused without  Strict Administrative Enforcement”

Interview with Finance Minister Nodar Khaduri

This February the number of shop purchase slips printed out of cash machines exceeded the previous February data by 2 million. Business turnover has increased. Production rates have soared. Prices are down. Export is on the rise. The incoming Budget resources are more than they have been planned. This is just a portion of the report disseminated in the last days by the chief state financial body and Department of Statistics. These and other

topics are the subject of our interview with the Finance Minister.

Nodar Khaduri: The January and February tax collection plans are met with large extras adding up to almost 22 million Lari. The main thing is evidently enhanced robustness of small and medium enterprises, the higher number of shop purchase slips and larger turnover. We manage to overfill the budget in full observation of the tax legislation, and without resorting to strict administrative measures. So, there is no issue of expenses ahead. I think the economic growth will continue and reach 6% for the year. 25% export increase is great but we are hoping for yet higher figure, including from the Russian direction. Notably, this increase in exports is not reached at the expense of re-export. Scrap metal export is down while citrus export is up by 600%.
Q: Compared to large companies, SMEs have a very modest share in the overall production. Do you have a plan to give a boost to this sector?
A: One of the important things to do in this regard is to render relevant legislative changes. Oddly, when thinking about this problem, only tax cuts come to everyone’s mind. In reality, first of all it is simplification of the tax code that needs to be done. Small business should not spend their scant resources on sophisticated accounting. To this end, investment funds are being set up. Certainly, we will extend more help to SMEs such as through mobilization of large enough resources for farmers and peasants.
Q: There are sectors where monopolistic entities, the legacy of the previous government, continue to feel fine…
A: Fight against monopolies, that is – facilitation of fair competition, should not be chaotic. It requires relevant laws and institutional framework. The previous Authorities were literally screaming to publicize their batmanship against corruption but nevertheless wound down the anti-monopoly service. For now, the monopolies have no more cover from the Government. This is already felt in several market segments. Small entrepreneurs have appeared on the scene at last, including in oil and pharmaceutical sectors. I think all these will eventually lead to better protection of consumer rights, lower prices and higher quality.
Q: Draft project on economic amnesty went down the drains…
A: This project prepared by the President and submitted to the Parliament in violation of the Constitution was an attempt to whitewash and legalize the loot. We would never accept such things, of course.
Q: Several days ago you returned from France…
A: I had meetings at the Trade and Industrial Chamber of Paris, Business Federation of France, Development Agency of France, Ministry of France, and Societe Generale. They know a lot about Georgia and plan to visit our country for closer observation and possible investment opportunities. The Development Agency of France looks set to open its office in Tbilisi. All these processes speak about the efforts by France and generally the EU to arrive to highly beneficial investment solutions for Georgia.


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