Discussion of the legislative initiative from the Association in the Parliament

From 2021 on, companies with the status of a Virtual Zone faced considerable tax pressure. During the early stages of the problem’s emergence, this topic was actualized and discussed in the media and other professional circles, raising concerns about the legality of charging companies with taxes and fines retrospectively. Furthermore, communication with state agencies is still relatively active today, despite the two difficult years and heated disagreements. 

The Association of Georgian Virtual Zone Persons held another working meeting in Parliament on June 28 to discuss a legislative initiative developed by the Association in collaboration with its partners that addresses all of the problematic issues identified in recent years.

The meeting was held with Mr. David Songhulashvili, chairman of the Sectoral Economy and Economic Policy Committee of the Parliament of Georgia, one of the active and leading committee chairman, who has a good understanding of the role of small and medium-sized businesses in the development of the country’s economy.

Shorena Kopaleishvili, the chairman of the Association of Georgian Virtual Zone Persons, David Papiashvili, the managing partner of the international network company “Kreston Georgia”, and Nino Ushikishvili, the Deputy Director of the European Business Association (EBA), all attended the meeting.

The developed initiative will regulate several critical and currently contentious issues concerning VZP company activities and taxation; regulatory norms will become precise and clear, preventing any party from interpreting them. Most importantly, businesses will be able to operate in a stable environment, which is important for any business.

The expectations of the Association for this meeting are quite optimistic, given that the amount of taxes paid by VZP companies in Georgia from 2011 to 2022 is more than 70 million GEL, hundreds of Georgian citizens are employed in VZP companies, more than 1000 companies have been granted VZP status, and all of this data from the month increases to a month. 

The positive expectations of the Association are supported by the fact that the Business Ombudsman and experts support the initiative of the Association, and there is great hope that the Ministry of Finance will also support this process because it is in the country’s interests, which determine the country’s positioning in this field, clear, strict and fair legislation, compliance with international standards, etc. If the legislation is not improved, new companies entering Georgia will leave the market, and we will miss out on a unique opportunity for the development of this direction and income. We consider it incredible that the state refuses to develop this business on the one hand and, on the other hand, revenues that are included in the budget of our country.