Economic effect of short-term period tax benefits in mountainous parts of Georgia

Abstract

Migration processes of high mountains and population growth of cities have led to depopulation in mountainous regions, rising unemployment in the city and a had a decrease in agricultural products, ultimately provoke external migration processes. These problems are typical not only for Georgia but also for the postSoviet countries and are relevant in the global context. The purpose of the study was to identify and analyse the effects of the short-term tax privileges for the mountainous regions of Georgia. The paper is dedicated to research and quantitative analysis of the impact of tax and social benefits on improving demographic conditions and regulating internal migration processes, both in the short and long-term perspective. The research methodology was based on the statistical processing of the survey results. For quantitative research, we used a structured questionnaire, which was developed by face-to-face interviews. Approximately 500 respondents were interviewed in 79 villages of 11 communities of Khulo, the Adjara Autonomous Republic, Georgia. The study revealed that by regulating tax and social benefits, it is possible to partially manage the internal migration processes of the mountainous region in the short run, while in the long run, a complex approach to the issue is important. In the mountainous parts, tax, social and other benefits will have a positive economic effect in the short term. Increasing the amount of income for individuals and legal entities is one way to stimulate the rural economy.