Management Target for 2010 Summary

Libertarian economic policies kick-start modernization Tax and tax rates slashed Now only 6 taxes, down from 21 Flat personal income tax of 20% (to come down to 15% by 2013) Corporate income tax 15% By 2012, no taxes on dividends, interest income, or world-wide income "Liberty Act": Referendum is required for an increase in tax rates Budget expenditure capped at 30% of GDP, effective FY 2012 Budget deficit capped at 3% of GDP, effective FY2012 Public debt capped at 60% of GDP, effective FY2012 Budget earmarks are limited Red tape and import duties cut Customs code harmonized with EU. Customs procedures reduced from 15 to 7 Capital controls abolished since 1990s Corruption significantly reduced In the World Bank's Ease of Doing Business survey in 2009 Georgia was 11th (out of 183), from 112th in 2005 In the 2009 Transparency International Corruption Index Georgia was 66th (4.1 score), just below Turkey (61st, 4.4), the same as Croatia and above Brazil (75th, 3.7), China (79th, 3.6), India (84th, 3.4) and Russia & Ukraine (146th=2.2) According to the International Republican Institute survey, 98% of Georgians didn't have to pay a bribe in the past 12 months In Forbes Tax Misery & Reform Index, Georgia was 4th best behind Hong Kong, UAE & Qatar Loka BANK OF GEORGIA Ambition: Create a fast-growing free enterprise economy that attracts investment and become regional logistical and banking hub www.bog.ge/ir May 2010 Page 8

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