On 20 February 2015, at the plenary session of the Parliament of Georgia, the United National Movement MP, Goga Khachidze, stated that during its time in office, the United National Movement used to decrease taxes and increase wages and pensions every year.

took interest in this statement and verified its accuracy.

The United National Movement was in power from 2004 to 2012.

The number of taxes was 21 in 2004. However, after the 2005 tax reform the number decreased to seven. There were seven types of taxes from 2005 to 2007 whilst in 2008 they decreased to six. Taxes included those such as vehicle tax, property transfer tax, natural resources tax, resort tax, local symbols tax and so on.

The VAT amounted to 20% in 2004 and 2005. It decreased to 18% in 2006. The income tax varied from 12% to 20% in 2004. It became fixed at 12% in 2005; however, due to merging the social tax and the income tax, it increased to 25-26.6% in 2008 whilst the social tax was abolished altogether. The income tax decreased to 20% in 2009. It has been set at 20% since 2010. As for the revenue tax, it amounted to 20% from 2004 to 2007 whilst it decreased to 15% in 2008 and has remained so ever since. The dividend income tax was equal to 10% from 2004 to 2008 whilst it decreased to 5% in 2009. The customs duties have decreased significantly since 2007.

It should be pointed out that the United National Movement did not decrease taxes in 2010, 2011 and 2012. Furthermore, the excise tax on tobacco and alcoholic beverages increased in 2010. Mobile telecommunications became subject to excise tax as well.

The new government has not decreased taxes since the 2012 Parliamentary elections. Furthermore, the excise tax on tobacco and alcoholic beverages increased. The plan of the previous government about gradually decreasing the income tax to 15% also changed.

Given the fact that the state has no direct leverage to influence the wages in the private sector, we assume that Mr Khachidze’s statement concerned the public sector only. However, it is, of course, possible for the state to create such an environment for business that the growth of wages is possible there, too.

 Average Monthly Nominal Wage in Public and Private Sectors

As the chart makes clear, the wages increased every year from 2004 to 2012 both in the public and the private sectors. However, the growth of wages continued in 2013 as well. The 2014 data are not yet available.

about the growth rate of pensions earlier as well.

 Amount and Growth of Pensions

The chart reflects the amounts and growth rate of pensions from 2004 to 2015. The amount of pensions grew every year from 2004 to 2008 from GEL 14 to GEL 70. The amount of pensions was equal to GEL 80 in 2009 and 2010. It grew to GEL 100 in 2011 and GEL 125 in 2012. Pensions grew in 2013 as well. No growth was recorded in 2014. As for 2015, pensions will grow by GEL 10 (6.7%) from September.

The tax burden decreased every year in the first six years of the United National Movement’s office (2004-2009). The excise tax increased in 2010. No taxes decreased in 2010. The new government has not decreased taxes since the 2012 Parliamentary elections.

The amount of wages in both the public and the private sectors increased every year during the office of the previous government. As for pensions, they increased every year as well (except 2010). It should be noted that the pensions also increased in 2013 with the next round of increase scheduled for after September 2015.