Expert opinion
President’s Strange Initiative
03 November, 2011

”First country to introduce age-wise tax incentives in legislation”

The President announced at the recent Governmental meeting that whoever would hire 45-60 year old people would get a full tax exemption. Last week Tamar Chergoleishvili, wife of Giga Bokeria, Secretary of Security Council, criticized a new initiative of Saakashvili on Facebook. Her post received an excessive number of similar responses. In the end, when one of the Facebook community members drew a parallel between Saakashvili and Ghaddafi, the wife of the

head of the State Security Council felt embarrassed and erased the whole status with comments. However, I managed to retain a copy of the page. We talked to expert Gia Khukhashvili on this new initiative, charitable work of billionaire Bidzina Ivanishvili and other interesting topics:

 

A: We are the first country which introduces the age-determined employment-related tax incentives into the tax code. I had an impression that the people who were standing next to the President during the announcement of the initiative were well aware of the unbelievable stupidity of the move. Yet, all of them agreed to the head of the state. Frankly, it was this fact which left me more concerned than the initiative itself. For some reason, I think the initiative will not shape up in the law.

Q: Yet, what if it does develop into the law after all?

A: If so, it will be a demonstration of political shortsightedness of the Authorities because the market can offer a limited number of jobs at any given moment. Are you going to get more jobs out of the blue sky? Do you know what would happen? They would get such jobs by freeing the employed young people, be they novices or professionals. Eventually, the Authorities will gain full access to the hearts and minds of 45-60 year old community but alienate younger generations. What is more, industries may informally employ young people but keep seniors on the payroll list. To cut it short, the sky is the limit to imagination. The Authorities would create a huge gap in the tax system just because of the age-wise discrimination.

Q: Last week, it became known that the Research Institute of Georgian Development was founded. What sort of research are you going to conduct there?

A: We will engage experts, including those supporting Governmental reforms, in our research activities. We will conduct studies of public opinion to palpate the grounds for this or other reforms, to find out if the public is inclined to receive them positively.

Q: Does the Research Institute have a contact with Bidzina Ivanishvili?

A: When we founded the institute, we approached various donor organizations for support. The first to respond was Bidzina Ivanishvili. He is ready to support all goodwill initiatives without interfering in our activities. We already received his guarantee.

Q: The National Bank expressed its readiness to allocate money to Cartu Bank in the amount similar to the recently arrested sum of Cartu Bank.

A: The Authorities act without proper thinking, eccentrically. They created a problem for not only Cartu Bank but the entire financial system. In reality, the bank of Bidzina Ivanishvili is just a tiny part of his assets. Hence, it has a solid backing from the tycoon. He himself is a guarantor that clients of his bank will not experience any hassle with money. The Authorities were late to realize that by fighting Cartu they harmed themselves more than Bidzina Ivanishvili. Likewise silly was the entry of the National Bank into Cartu with an excuse that there was the need to ensure financial stability in this specific way. Apparently, the most sensible option in the situation is the immediate return of arrested Cartu millions.

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