President of the Republic of Abkhazia




Sukhum, 16.00

President Raul Khadzhimba had a meeting with the heads of the Association of the Businessmen of Abkhazia and the representatives of business. 

Vice Premier Dmitri Serikov also participated in the meeting.

Questions related to tax reform were discussed, in particular the work on the implementation of the Law “On Value Added Tax”, improving the tax administration and the optimisation of the tax system.

The President stressed that it is important to have a dialogue between the government and business. He noted that the economic policy of the state aims to support and develop business, also by giving loans and subsidising the interest rates on loans. “In 2016, we have allocated around 300 million rubles of the budget for this purpose, plus additional loan resources in the banking sphere”, - said the President.

Raul Khadzhimba remarked that most citizens of Abkhazia showed understanding with regards to the introduction of the import VAT, since the aim of this measure is not only to increase the revenue side of the budget but to also take the economic activity out of the shadow. It is surprising that it is not the buyers who oppose the introduction of the import VAT, but the businessmen who raise prices. Price formation is often unfounded, since prices are raised on those products which are exempt from VAT. “Why have the prices on auto parts been raised? We have exempted their suppliers from VAT. Why has there been an increase in prices on a range of food products, which are also exempt from VAT? Someone is using the debate on VAT to manipulate the prices and mislead our citizens. It turns out that they raise prices as they see fit and then they blame the government. It is unacceptable”, - remarked the President.

Chairman of the Association of the Businessmen of Abkhazia Roman Kacharava expressed the view of the Association of the Businessmen of Abkhazia, which believes that it is necessary to make amendments to the Law on VAT with the aim of reducing the import VAT to 4%. “If we go this way, then we will not encourage the businessmen to hide their profits. This will stimulate the growth of the market”, - said Roman Kacharava. He added that businessmen would be ready to see a gradual increase of the import VAT.

Vice Premier Dmitri Serikov noted that most of the issues, expressed by the Association of the Businessmen of Abkhazia, are not related to the VAT, but to the institutional obstacles which still hinder the development of business in Abkhazia. In particular, it is the lack of working capital, which is why the government is considering to implement a VAT payment deferral mechanism for the importers. At the same time, the government is working on additional measures of supporting business, in particular the subsidising of interest rates on loans. Within the framework of a special program of the Ministry of Economy, which is financed through the state budget, measures will be implemented to support small and middle sized businesses.

Concluding the meeting, the President remarked that the tax reform should not be stopped. However, he is ready to communicate with the business circles on a regular basis, in order to minimise the negative consequences of state decisions.

At the end of the meeting, the participants of the meeting reached understanding on key issues.

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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