Today Small Business struggles to Make Reinvestments: AYFB


Photo/ RFE/RL

New tax preferences intended for small business sector will come into force with July 1. The actual government’s initiative entails cutting the turnover tax for small business? 5 times. As a result, companies with 500 500 GEL turnover will probably move to the category associated with small business.

YFB vice president Paata Bairakhtari originates the initiative, although he also outlines challenges that may arise.

Small plus medium business is any backbone of condition economy in western world. But we have reverse of situation C small and medium business in the gravest situation. One example is, medium business utilizes 4 times less consumers, than the major home business. Last year we released Estonian Model of profit tax and, in practice, only major business possesses gained benefits from the idea, because today independent business is not able to make reinvestments. Deficit arisen after arrival of the mentioned version was covered by independent business and ordinary individuals. Unlike Estonian model, your mentioned initiative is usually directed to development of small enterprise, because the small business can save financial resources, specific niche market, and protect on its own from bureaucratic barriers, on the other hand. However, the mentioned tax preferences furthermore comprise certain dangers. For example, nobody shares? about how the budget shortage will be balanced following enactment of the mentioned regulation. Nobody says if this deficit can? be balanced by means of ordinary citizens, because happened in case of Estonian Model. These issues comprise major risks and require beneficial calculation and analysis. Otherwise, serious terrors may arise while in the country, Bairakhtari noted.


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