The Georgian Parliament might do away with public involvement when deciding to increase or introduce new taxes
The Georgian Parliament is currently holding committee hearings of an updated version of the country’s Constitution. One of the suggestions proposed during these hearings by members of the parliamentary majority was to remove Article 67 (Article 94 of the acting Constitution), which requires the government to hold a referendum if it wishes to impose a new kind of state tax (except in case of excise tax), or increase the upper limit for an existing tax (except in cases stipulated by an organic law).
It is unclear why the ruling party has changed its position regarding this provision, considering the fact that previously the Parliament had repeatedly supported retention of this article in the Constitution. Both business and non-governmental organizations have also criticized the idea of removing Article 67.
We believe that public involvement in deciding to increase taxes is directly linked with the accountability of the Government and the Parliament. The public must have the opportunity to participate in the decision to introduce a new tax or increase the upper limit of an existing one. The government must not have the opportunity to make such decisions single-handedly.
The removal of Article 67 will negatively affect the country's attractiveness for investors and predictability of its business environment. We believe that this provision must remain in the new Constitution, in order to preserve and increase Georgia’s economic growth and attractiveness of its business environment. We remain hopeful that the Parliament refuses to support the removal of Article 67.
Transparency International Georgia (TI Georgia)
Economic Policy Research Center (EPRC)
Georgian Democracy Initiative (GDI)
International Society for Fair Elections and Democracy (ISFED)
Society and Banks
Europe for Georgia
Policy and Management Consulting Group
ISET Research Institute
Atlantic Council of Georgia