Can VAT exemption on dairy products produced from domestic raw milk boost the competitiveness of Georgian dairy sector?

The objective of the study was to estimate the potential impact of VAT exemption on dairy products on the competitiveness of dairy sector in Georgia.

The research team assessed the impacts of the VAT exemption using quantitative and qualitative analysis methods:

• Applying Regression Analysis to derive elasticity coefficients for demand and supply of two related markets: raw milk and dairy products;

• Employing partial equilibrium analysis to derive new equilibrium quantities and prices of raw milk and dairy products in case of VAT exemption;

• Conducting face-to-face interviews with sector representatives to get their perception about VAT exemption on dairy products.

The study assessed potential impact of VAT exemption on the state budget, raw milk and milk products’ producers as well as consumers.

The research team developed recommendations for VAT exemption policy implementation in order contribute to the increase in the competitiveness of Georgian dairy sector.


Main Researchers

Irakli (Rati) Kochlamazashvili

Salome Gelashvili

Salome Deisadze

Ia Katsia

Pati Mamardashvili

Donors and Partners

Land O'Lakes Venture 37

U.S. Department of Agriculture (USDA)

Project Milestones

Status: Completed

Start Date: June, 2019

End Date: September, 2019

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