The Contribution of Virtual Zone Taxpayers to State Budget
Dynamic Growth in Tax Contributions
Tax payments from Virtual Zone Taxpayers (VZPs) continue to exhibit extraordinary growth, reflecting their expanding role in Georgia’s economy. In 2023, total contributions reached 86.1M GEL, while in just the first 10 months of 2024, this figure has already risen to 85.4M GEL. This near parity in less than a full year highlights the sector’s dynamic progress and its critical importance to the national budget.
A closer look at income tax, the largest contributor, underscores the growing employment opportunities within the VZP sector. This tax category not only demonstrates increased job creation but also indicates rising salaries and greater economic engagement from local talent. Complementing this are substantial contributions from profit tax and property tax, showcasing active investments and sustainable profitability across the industry.
Steady Momentum in 2024
The tax contributions during the first 10 months of 2024 reflect consistent and robust growth. Despite global and local economic and political fluctuations, VZP companies have maintained their upward trajectory, further solidifying their position as drivers of economic resilience and innovation.
A Pillar of Economic Development
The remarkable rise in VZP contributions over this period illustrates the growing influence of the virtual zone sector in Georgia’s economic landscape. With a cumulative contribution of nearly 171.5M GEL since January 2023, this sector stands out as a key enabler of technological advancement, job creation, and stability of the sector.
To sustain this growth, continued government support is vital. Stable policies, innovation-friendly frameworks, transparent legal and taxation framework and enhanced infrastructure development will not only safeguard the sector’s competitiveness but also ensure its potential as a long-term pillar of national economic success.
Conclusion
The data from January 2023 to October 2024 underscores the exceptional trajectory of Virtual Zone Taxpayers. Their contributions have solidified Georgia’s position as a hub for IT and digital services, fostering economic growth and creating opportunities for future development. With the right support and policies, this sector has the potential to remain a cornerstone of Georgia’s economic progress.
