Trends in the development of agriculture in conditions of tax reform in Georgia

At the current stage of development of the Georgian economy and in conditions of existing resources, only the agriculture sector can contribute to the reduction of high levels of poverty and unemployment in the country. Improper assessment of the role and importance of the sector, lack of programmes based on scientific research, inconsistent reforms led to the low competitiveness of Georgian agricultural production and the prevalence of imported products on the internal market. The aim of this paper is to assess the impact of tax reform on the development of the agriculture sector in Georgia, and to compare it with Latvia, as it has been implemented in both countries based on Estonian experience. It is substantiated by means of theoretical and empirical methods applied in the article, that the land reform, implemented in Georgia before the profit tax reform, as well as financing of certain projects in the sector, was carried out without proper analysis and assessment of expected risks. The research concludes that for the development of agriculture sector of Georgia, it is especially important, at the first stage, to elaborate and implement mechanisms of protection of internal market, develop the existing infrastructure, promote cooperative enterprises, extend tax benefits to all spheres of activities of agricultural cooperatives, commence the process of structural diversification and modernization of the sector, and overcome the obstacles existing on external markets.