Georgia

Georgia: Irakli Karseladze approves drafts of amendments to Budget code

Tbilisi: Irakli Karseladze, the Georgian Minister for Regional Development and Infrastructure, has approved for certain amendments in the draft budget 2023. As per Karseladze, the ministry would continue to implement the decentralization strategy and the measures taken into account by this strategy.

Today we approved the draft of amendments to the Budget Code, which aims to increase the incomes of municipalities for strong self-government“, stated Karseladze.

The bill and the changes are expected to take effect from January 1, 2023, and, as a result, will gradually increase the revenue of municipalities from the loss of registered state-owned lands on their territory.

 In order for municipalities and the budget of Adjara and the Autonomous Republic of Abkhazia to receive additional income from the properties in their territory, amendments to the Code will be of the following kind: state land lease and management from the transfer, the distribution between budgets will increase by 15 per cent (in favour of the local budget) and, accordingly, the distribution today (at 65/35) will be replaced by 2023 – 60/40; and in 2024 – 50/50.

From 2024, sales of state-owned agricultural land will increase by 25 per cent among budgets, thus keeping local budget revenues at 90% instead of 65%. Also, starting in 2024, a 10% increase in state-owned non-agricultural land sales will still benefit the municipality, and local budget revenue will be 60% instead of the current 50%.

 Additionally, from 2024, from the sale of state-owned major assets, buildings and buildings placed on non-rural land, an additional 5% will go to the local budget, which will become 40% instead of 35%. This is the successful practice we have already defined and planned for through our Decentralization Strategy.

The past two years, in terms of the implementation of the Decentralization Strategy and Action Plan, have been successful. “The draft amendments to the budget law are part of action initiatives aimed at enhancing the rights of local governments and their financial empowerment and independence” – the Regional Gan Minister of Situation and Infrastructure Irakli Karseladze made a statement after the government session.

Zurab Kvaratskhelia

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