DOI:10.52340/ekonomisti.2025.04.08

Expanded summary 

The aim of the paper is to study and analyze the ongoing demographic processes in Georgia and to find ways of overcoming the existing problems.

To achieve this goal, the first part of the paper discusses the results of the general population censuses carried out at the end of the Soviet Period in 1989, and subsequently in 2002 and 2014 after the restoration of the country’s independence, as well as preliminary data for the 2024 census. 

Taking into account the undesirable trend of population decline in the country as a whole (including the titular nationality—ethnic Georgians), as well as of the working-age population and of women of reproductive age, as highlighted through research-systematization of the aforementioned data, as well as of all relevant data, the paper outlines an opinion on the feasibility of creating and using a mechanism for the financial stimulation of the ongoing demographic processes in the country. 

Considering the budgetary difficulties identified as a result of the review of the State Budget of Georgia laws of the previous years and the important parameters of the 2026 draft law, namely for the period of analysis (2016–2026): the permanently deficit nature of the State Budget of Georgia, the growth rate of domestic liabilities (mainly debts taken within the country), the significant excess of the growth rates of total and tax revenues of the State Budget, and the undesirable reality of paying off old debts with new debts, in order to improve the process of mobilizing financial resources necessary to stimulate demographic processes in the country, an opinion is presented on improving the mechanism of property taxation of non-residents—mainly foreign citizens and stateless individuals. 

For the practical implementation of the above suggestion, an opinion is presented on amending the Tax Code of Georgia. In particular, it proposes the imposition of the obligation to pay property (except land) tax on non-residents—mainly foreign citizens or stateless individuals—who own real estate in Georgia, regardless of the amount of income received by them and/or their family members during the calendar year. 

One of the arguments for the adoption of the proposed legislative amendments, in parallel with the stimulation of the process of mobilizing the country’s budget revenues, is the opinion that the enactment of the aforementioned rule will not lead to a violation of the country’s legislation, including the provisions of the Organic Law of Georgia “On Economic Freedom”. This is because the new mechanism of property taxation is based on the expansion of the scope of application of existing legislative norms and does not envisage either the introduction of a new tax or an increase in existing tax rates. 

In order to purposefully stimulate the demographic processes taking place in the country with the increased budget revenues resulting from the implementation of the proposed rule for improving the property tax, an opinion is presented on the creation of a specialized state fund. 

For the distribution of property tax paid by non-residents of the country—mainly foreign citizens and/or stateless individuals—between the budgets of local governments and municipalities and the accounts of the fund, an opinion is proposed on the adoption and implementation of a new rule for the distribution of funds mobilized in the form of property (except land) tax in the Budget Code of Georgia. 

At the very first stage of the Fund’s operation, the creation and implementation of financial incentive mechanisms focused on overcoming demographic problems is recommended as a priority activity. Within the abovementioned framework, the implementation of a mechanism for establishing monthly scholarships (until a certain age) for the third and subsequent children of Georgian-speaking (and Abkhaz-speaking in the Autonomous Republic of Abkhazia) families within the framework of the State Language Support Program of Georgia is considered to be of particular importance. 

Key words: demographic problems, birth rate, migration, depopulation, demographic collapse, budgetary difficulties, improvement of property tax.