After a hike in excise tax on cigarettes in January 2017, the Parliament of Georgia is going to introduce legislative changes to the existing tobacco control law (TCL) in March. Since its enactment in 2003, TCL has been modified several times. However, the recently proposed changes can be considered the most radical step towards a tobacco-free society in Georgia. New draft law comprehensively covers production, packaging, marketing, advertising, selling and consumption of tobacco, and other activities of tobacco businesses.

The so-called “Economic Freedom Act” (EFA), which has been a matter of public discussion in recent weeks, refers to two pieces of legislation: (i) a Constitutional amendment from 2010, which requires a referendum for introducing new taxes or increasing the tax rate, and (ii) the Law on Economic Freedom (2011), in force since 2013, setting a number of additional restrictions to government fiscal policy (Table 1).

Economic reforms announced in the run-up to the parliamentary elections in October 2016 raised concerns about whether Georgia was departing from its path of prudent fiscal policy. A reform of the corporate profit tax and increased infrastructure investment were driving expectations of a 6% of GDP budget deficit in 2017, endangering Georgia’s macroeconomic stability and its reputation with investors.

It is a truth universally acknowledged, that cigarettes are bad for human health. Yet, whenever the government tries to regulate the consumption of cigarettes by increasing their price, it gets a very mixed reaction from the public. Some people (mostly non-smokers) welcome these policies, while others accuse the government of being greedy and proclaim the policies ineffective. Who is right and who is wrong in this debate? Let’s take a closer look at the facts.

Teimuraz Gogsadze, a graduate of ISET's Class of 2011, joined the International Taxation Division of the Tax Policy Department at the Ministry of Finance of Georgia in May 2011. He worked on such interesting projects as the double taxation avoidance agreement and agreements on mutual administrative assistance in customs matters, gaining invaluable experience at the Ministry of Finance. Having spent almost a year at the Ministry and inspired by the experience regarding taxation matters, Teimuraz decided to continue his studies with a PhD program. In April 2012, he joined the PhD program in Economics at the University of Leicester, where his supervisors were Professors Sanjit Dhami and Ali al-Nowaihi.