Dear Maddalena and team,

Please see attached the answers to the questions in your email.

Please let us know if you have any further issues for clarification.

Best,

Eka

ეკატერინე გუნცაძე

საბიუჯეტო დეპარტამენტის უფროსი

საბიუჯეტო დეპარტამენტი

საქართველოს ფინანსთა სამინისტრო

ქ. თბილისი, გორგასლის ქ. #16

Ekaterine Guntsadze

Head of Budget Department

Budget Department

Ministry of Finance of Georgia

16 Gorgasali str., Tbilisi, Georgia

e.guntsadze@mof.ge

+995 32 2261 423

+995 577 051 590

Dear Ms. Guntsadze, Ms.Chakvetadze and Ms. Barkalaia,

Many thanks again for the every productive meeting yesterday. We are glad we reached an agreement on the scope of the project. As we are preparing the package of documents for the project , we have the following clarification questions. We understand it is a work in progress and many details are not yet set. To the extent possible we’d appreciate your feedback on the current thinking on the following aspects to inform the costing and implementation arrangements of the project.

Thank you in advance for your response. We are of course available for a call, if more convenient.

• Regarding the temporary unemployment benefit for people who are laid-off :

• We understood that the application for the benefit will be done by employers, who will submit names, bank account details and individuals tax ID number to MOF (or to which agency?).  Please confirm.
• Do all formal wage workers have a bank account?  if not, how do you plan to transfer the benefit to those who don’t have bank accounts?
• Which agency/ministry would be responsible for the payment of the benefit? Would there be any extra cost for you associated with the transfer?
• We understood that incentives to report a false lay-off are little for employers (given the wage subsidy), but is there something planned to verify bank account holders and claims of dismissal?

• Regarding the retention scheme/w:

• Based on the income tax database, how many formal wage workers do you have below and above the 750 GEL/month threshold?
• Could you please confirm that the tax relief will be directly implemented by waiving the 20% income tax on payroll for workers with monthly wages below 750 GEL (and 10% for workers above the 750 GEL threshold)?
• Please confirm whether the duration will be 4 months as for the temporary unemployment benefit.
• Will the revenue service apply the tax relief to all registered companies automatically or is it on-demand basis (hence employers have to apply?)?

• Regarding the one-off/temporary emergency benefit assigned based on the PMT scoring formula:

• Please confirm how many households are actually receiving ONLY the child benefits based on the registry data as of March 2020) and how many receive both TSA and child benefit.
• Will the temporary benefit of 200 GEL be added to the social assistance benefits households are already receiving (including the child benefit) or do you envision topping up whatever the household is getting to reach the amount of 200GEL per household? In the latter case, would the 200 cap apply to TSA recipient households?
• We understand that for the month of April you will use the information already in the registry to assign the emergency benefit (to about 70,000 hh with score between 65,000 and 100,000). For the month of May, applications will be opened for the emergency benefit (in addition to the regular application process for the TSA) using the same application form used to apply to TSA. Is our understanding correct?
• New applications (those that come in in May) will be assessed and scored according to the existing scoring formula and the emergency benefit assigned to hh with score between 65,000 and 100,000.
• How long does it take for the household to receive the benefit (number of days between the day the application is submitted to the day the payment is made)?

Looking forward to hearing from you

Maddalena, on behalf of the team