Georgian Parliament approves first reading of excise tax changes on cigarettes

The Parliament of Georgia on Tuesday approved, in the first reading and under an accelerated procedure, amendments to the Tax Code that introduce new excise tax rates on cigarettes.

The motion passed with 77 votes in favour and one against.

Under the draft legislation, a fixed excise tax of ₾1.3 and an ad valorem rate of 15 percent will apply to up to 35 million packs of domestically produced cigarettes.

For imported cigarettes, the fixed excise rate will increase from ₾1.9 to ₾2.75 per pack, while the ad valorem rate will be reduced from 30 percent to 20 percent. The same adjusted rates will apply to domestically produced cigarettes exceeding the 35-million-pack threshold.

Presenting the bill, Shota Berekashvili, Chair of the Parliamentary Committee on Economic Policy, said the primary aim of the changes was to support local production and to establish a “fair and balanced” excise structure for cigarette importers within the existing tax policy framework. He added that the reform was expected to deliver a “positive fiscal impact” by increasing state budget revenues.