Joint Statement of the Leading Business Associations of Georgia on Article 94 of the Constitution

13 Jun '17

"As far as we are aware, possibility of abolishing Article 94 of the Constitution of Georgia, according to which the introduction of a new tax or increase of a tax rate is permissible only through a referendum, is still under discussion in the course of constitutional amendments.

We, the leading business associations, believe that maintaining the existing form of Article 94 of the Constitution is essential for the economic growth and development of the country, and for maintaining a stable business and investment environment.

Based on the great importance of the issue, we considered it necessary to once again explain the necessity of maintaining this record, as:

1. It is important to maintain and strengthen a unique investment environment in Georgia.

This record provides the stability and foreseeability of fiscal policy on the constitutional level, making Georgia attractive for foreign investments, and promotes local entrepreneurship development. Its maintenance is extremely important in the light of socio-economic problems and geopolitical challenges faced by Georgia. Economic growth in the country is largely driven by foreign investments and investment activities of local entrepreneurs.

The investor has the opportunity to invest in any country of the region or the world and in this respect the competition between the countries is constantly growing. To attract investments, Georgia should offer the investor a unique, stable investment and business environment. In any other case it is not clear what the competitive advantage has Georgia in comparison with other countries and regions.

The abolition of this record will significantly worsen the competitiveness of Georgia in terms of investment attractiveness and reduce the inflow of investments, which negatively affect economic growth and hamper the development of the country.

Therefore, we believe that the constitutional record and accordingly adopted organic law on "Economic Freedom" should be maintained.

2. In addition, we believe that citizens of Georgia should have the right to decide whether to increase their taxes.

The right of citizens to decide the issue of increasing tax rates through the referendum is directly related to their right to dispose of their own income and to do this in the form of direct democracy.

Based on the aforementioned, we are convinced that the disappearance of this important guarantee from the main law of the country will create a sense of instability and anticipation of the growth of taxes that will be equally damaging for the country's economy, citizens and business sector.

We address and ask everyone who is involved or may be involved in the abovementioned decision making process - to maintain one of the most important guarantees of stable economic development of the country - Article 94 of the Constitution of Georgia."

 

American Chamber of Commerce in Georgia (AmCham)

 

Georgian distributors Business Association (GDBA)

 

Infrastructure Construction Companies Association (ICCA)

 

Association of Banks of Georgia (ABG)

 

Business Association of Georgia (BAG)

 

EU-Georgia Business Council (EUGBC)

 

Taxpayers Union of Georgia 

 

Georgian Employers' Association (GEA)

 

Georgian Small and Medium Enterprises Association  (GSMEA)

 

Georgian Producers' Federation

 

International Chamber of Commerce in Georgia

 

Georgian Farmers' Association  (GFA)