A new draft amendment to Georgia’s Tax Code, introduced by Georgian Dream MPs, proposes significant changes to excise duties on imported vehicles, particularly targeting older cars.
Proposed Excise Changes
- Vehicles aged 0–6 years: Excise rate set at GEL 1.5 per cubic centimeter.
- Vehicles over 6 years: Excise rate increased to GEL 4.5 per cm³.
Under the current system, older cars benefit from lower rates. For example, a 6-year-old car with a 2.5L engine currently pays GEL 2,000 in excise which would rise to GEL 3,750 under the proposed rules. Hybrid vehicles under 6 years old would receive a 60% reduction on excise duties.
The legislation’s goalto:
- Reduce Georgia’s reliance on older vehicles.
- Improve road safety.
- Increase fuel efficiency and lower emissions.
- Encourage the import of newer vehicles by creating apredictable and stable tax environment.
The draft argues that the current excise system fails to incentivize newer car imports, as low rates for 6–8-year-old vehicles make older imports economically attractive. The proposed excise adjustments are expected to shift import patterns toward newer, safer and more environmentally friendly vehicles.
The explanatory note does not provide a precise estimate of additional revenue. However, 2025 excise duties from car imports generated GEL 329 million for the state budget. The note suggests that while higher rates on older cars may reduce imports in that segment, a shift of about 60% of importers to newer vehicles could offset potential revenue losses.
Although the government supports the policy goals, the draft law was initiated by Georgian Dream MPs, not by the government administration itself.
