Issue 29: Tax Revenue – January-July 2014

In July 2014, the volume of tax revenues exceed (12.4 %; 98.2 mln. GEL) the corresponding indicator in July 2013 and reached 647.4 mln. GEL. Tax revenues increased in all categories: value-added tax (VAT) (17.1 %; 41.2 mln. GEL), income tax (13.7 %; 20.5 mln. GEL), import tax (6.0 %; 0.5 mln. GEL), profit tax (4.9%; 5.0 mln. GEL) and excise tax (4.1 %; 3.0 mln. GEL).

 Source: Ministry of Finance of Georgia

In the period of January-July 2014, the volume of the state budget revenues exceed (7.0%; 266.3 mln. GEL) the coressponding indicator in 2013, and reached to 4 070.8 mln. GEL, which is 55.6% of the planned budget revenues, for 2014. In this period, tax revenues increased (8.2%; 292.6 mln. GEL), but the revenues from grants (-19.5%; -18.6 mln. GEL) and other receipts declined (-5.1%; -7.7 mln. GEL). The share of grants (1.9%) and other receipts (3.5%) in the state budget is small.

In the period of January – July 2014, the share of each tax revenue in total tax revenues is the following: value-added tax (47.8%, 1838.7 mln. GEL), personal income tax (25.3%, 973.4 mln. GEL), profit tax (13.8%, 530.1 mln. GEL), excise tax (11.4%, 437.2 mln. GEL) and import tax (1.7%, 57.2 mln. GEL).

In the period of January-July 2014, state budget expenditures exceed (20.5%; 688.1 mln. GEL) the corresponding indicator in 2013 and reached to 4 047.4 mln. GEL., which is 53.7% of the planned budget expenditures, for 2014.

In January-july 2014, all the components of the state budget expeditures increased, the highest growth is in – social expenses (31.9%; 350.6 mln. GEL) and expeditures on goods and services (30.3; 110.8 mln. GEL).

In the period of January-July 2014, revenue from VAT exceeds (15.9 %; 252.2) the indicator of corresponding period in 2013.

In July 2014, revenue from VAT exceeds (17.1%; 41.2 mln. GEL) the indicator of July 2013.

Growth of revenue from VAT is mainly due to the following factors: 1) the special taxation regime change since June 2014, which means that goods and services are taxed in the process of importing; 2) growth of economic activity.

 Source: Ministry of Finance of Georgia

In the period of January-July 2014, revenues from the income tax is lower (-1.5%; -15 mln. GEL) compared to the indicator of corresponding period in 2013. This change is due to the income tax return of tax-exempt income, in the period of April-June 2014. In April 54 900 mln. GEL, in May – 34 300 mln. GEL and in June – 35 900 mln. GEL. was returned.

In July 2014, the income tax revenue exceeds (13.7%; 20.5 mln. GEL) the coresponding indicator in July 2013.

Source: Ministry of Finance of Georgia

Source: Ministry of Finance of Georgia

In the period of January-July 2014 , revenues from excise tax increased (12.7%; 49.4 mln. GEL) in comparison with the corresponding period of 2013.

In Julky 2014, revenues from excise tax exceed (4.1%; 3.0 mln. GEL) in comparison with the corresponding period of 2013.

In the period of January-July 2014, import tax revenue increased (14.9%; 7.4 mln. GEL), compared to the corresponding period in 2013.

In July 2014, import tax revenue exceeds (6.0%; 0.5 mln. GEL) the corresponding indicator in July 2013. Although the volume of import tax revenue increased, in absolute terms the growth is not significant (0.5 mln. GEL).

Exchange rate is an additional factor that affects revenues from the import tax. In July 2014, the revenue from import tax increased due to the increase in the volume of import (11.2%) compared to the corresponding indicator of 2013. Furthermore the exchange rate fell down by 6.3%, compared to the corresponding indicator of July 2013.