Advisory project on Banking launched to assist Georgia

IFC, a member of the World Bank Group, in partnership with the Netherlands and Luxemburg, launched an advisory project to support Georgia in reforming the tax system for micro and small enterprises on Septmeber 17. Reforms will help reduce administrative burden and improve operations for Georgian companies.

Focusing specifically on the needs of micro and small and midsize enterprises, the IFC Georgia Tax Simplification Project will work to lower tax compliance costs by introducing simplified taxes, risk-based audits, more rational use of penalties, and streamlined tax appeals systems. The project also will work to improve public awareness on tax reform and expand outreach to taxpayers.

“Recently, Georgia’s Ministry of Finance and business community have made joint efforts to reform the tax system and further liberalize it,” said Kakha Baindurashvili, Minister of Finance of Georgia. “I would like to thank IFC for their cooperation and help in introducing provisions in the new legislation based on international best practices that will benefit businesses, including small and medium enterprises.”

Georgia has recently undertaken significant tax reforms to ease the administrative burden of enterprises and improve the country’s overall business climate. According to a survey conducted by the World Bank Group and European Bank for Reconstruction and Development in 2008, the share of small businesses reporting tax administration as a major obstacle is several times higher than among medium and large companies.

“The Georgian government is one of the most active reformers in the world and we are happy offer our support and expertise to further improve the country’s business environment for small and medium enterprises,” said Thomas Lubeck, IFC Regional Head, Caucasus.

Georgia became a shareholder and a member of IFC in 1995. Since then, IFC has committed $500 million in 35 projects across a variety of sectors. Since 2003, IFC has implemented comprehensive advisory programs to improve corporate governance and the business climate, particularly for small and medium enterprises, and has recently launched a food safety improvement project.