President of the Republic of Abkhazia




 Sukhum, 12.00

President Raul Khadzhimba held a meeting with Abkhazian businessmen.

Below is the text of the President’s speech.

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Dear colleagues!

The biggest taxpayers of our state have gathered here today. I am grateful to you for accepting my invitation. I also want to thank you for your contribution to the economy of the state. Being the heads of the biggest companies, you are essentially the heads of companies that contribute the most to the state budget. 

Our reforms allowed us to create an entirely new budget for 2016 – a budget of development which shows that our own revenues and expenses have almost doubled. For the first time, we are able to talk about the budget of development which will allow us to independently finance small and middle-sized businesses through a program in the amount of 300 million rubles. These reforms are a good foundation for future progress.

I think that our main goals in the economy for 2016 are the forming of points of economic growth, ensuring financial transparency, taking the economy out of the shadow and the paying of taxes by all those participating in the economic activity of the Republic of Abkhazia. 

We know that the share of collected taxes and fees is less than 5 percent of our GDP. For comparison: in Russia and the states of the Organisation for Economic Co-operation and Development (OECD) this figure is more than 35 percent. This means that most of the Abkhazian tax basis is in the shadow. 

At the same time, we will create the most favourable conditions for the development of small and middle-sized businesses, in order to form a business class. We will actively create tax preference, develop the instruments of concessional lending and lower the administrative barriers. It is necessary to lift the limitations on businesses, to relieve them of excessive control. There should not be any intrusive monitoring. 

Last year, the following laws “On Currency Regulation and Currency Control”, “On the Prevention of Money Laundering”, “On Fighting Corruption” have been developed. Moreover, the laws “On the Special Tax” and the VAT have been reformed.

I want to speak separately about the law “On the Value Added Tax”. Unfortunately, we were the only country in the world which charged local producers with this tax, while exempting foreign producers from it. This meant that the budget lost hundreds of millions of rubles. 

We are ready to implement further reforms, such as the reform of the law “On Accounting”, the introduction of modern technologies to the document management, reforms in the spheres of banking and insurance, further strengthening of anti-corruption and investment legislations, and the reduction of ineffective taxes.

Under my instructions, a working group on the optimisation of taxes, fees and other mandatory payments has been created. Our main goal is to make the number of taxes reach 10-12, and to create a tax payment process which would be simple, transparent and automatic.

This year, the Presidential Centre of Strategic Research developed and presented a “Strategy of the Socio-Economic Development of the Republic of Abkhazia until 2015”. The goals have been identified, as has been the appropriate level of investments. The most important thing is that we should work together with the heads of big companies. These people have a big practical experience. They know the market and know how to successfully implement the “Strategy of the Socio-Economic Development of the Republic of Abkhazia”.

We will continue to support important investment projects. This will help attract modern technologies to all industries and will allow the Republic of Abkhazia to participate profitably and successfully in the Eurasian integration process.

Without any doubt, only together will we be able to develop and implement new approaches to the provision of secure and stable development of our country in a long-term perspective.

I would like to hear from you what else needs to be done to support businesses and their competitiveness, as well as to ensure the progress of the economy and the creation of a stable business class. What hinders the development of our state the most? 

I will be grateful to hear a frank and enthusiastic discussion.

Thank you for your attention.

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© 2015 Administration of the President of the Republic of Abkhazia, Sukhum, Naberezhnaya Makhadjirov, 32, phone.: +7 840 226 46 31, fax: +7 840 226 46 31
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