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G E O R G I A

G E O R G I A. Ministry Of Economic Development Of Georgia 2005. GEORGIA. Georgian Trade 1994-2004 ( ml USD ). FOREIGN TRADE ($USD millions). TOP TEN TRADING PARTNERS 200 4 ($US millions). Trade turnover in 2004. FOREIGN DIRECT INVESTMENT.

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G E O R G I A

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  1. G E O R G I A Ministry Of Economic Development Of Georgia 2005

  2. GEORGIA

  3. Georgian Trade1994-2004 (ml USD)

  4. FOREIGN TRADE($USD millions)

  5. TOP TEN TRADING PARTNERS2004($US millions)

  6. Trade turnover in 2004

  7. FOREIGN DIRECT INVESTMENT Peaks in 1997-98 and 2003-04 are connected to construction of pipelines

  8. INCENTIVES • WTO membership – MFN trade regimes with 146 countries; • CIS Free Trade Zone – Free access of CIS market; • GSP – European Union, Switzerland, Turkey, Canada, USA and Japan • Liberal tax regime - Lowest rates in the region • Fiscal Support for Exporters – Quick VAT refund scheme for exporters. Duty and tax callback regime for goods imported for re-export • Favorable transport location – Access to Europe, CIS and Asia markets. Rail, Road, Sea, Air connections • Rapid reform process – Governments commitment to reforms Improving business and service environment, Governments support for FDI attraction

  9. Guiding Principles of Economic Reforms • Liberalization • Deregulation • Private sector as a driving force of economic development • Broad based economic growth as a major instrument for fight against poverty

  10. Reform of Licensing system • Reduced number of activities subject to licenses and permits • Simplified licensing procedures • Reduction number of required licenses and permits from 909 to 159 • Reduction number of controlling agencies • Possibility to transfer ownership of use licenses

  11. Tax Reform New Tax Code from January 2005 • 7 taxes instead of previous 21 (income, profit, social, property, excise taxes, VAT, tax on gambling business) • Reduced tax rates: VAT 18% instead of 20% (from July 1st 2005) Income tax 12% flat instead of 12-20% proportional Social tax 20% instead of 33% • the possibility of 100% amortization in the year if investment • a quick mechanism of VAT refund for exporters within a month.

  12. Trade Duties • From January 2005 16 import tax rates instead of 22 before; • Import tax rates fall in 0%-30% range • There are no quantitative restrictions on imports • A limited number of licenses and permits on exports and imports (now only 8) • Export and re-export is free from custom duties • Export is free from VAT

  13. New GSP+ Scheme of EU • NewGSP+scheme works from July 1st2005 until 2008 • New Scheme envisages additional preferences for sustainable development and good governance • 7200 products will enter EU market with Duty free access • Georgia is only a beneficiary country among CIS countries

  14. Liberalization of Transportation • reduction in number of licenses and permits in transportation sector from 15 to 5 • Air transport - liberalization of tariffs, flight frequency and capacity, number of carriers and destinations • Road transport – elimination of transport duties, different transportation barriers • Sea transport – extension of main Trans-European Transport Axis to Georgia -

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