Taxation burden in Georgia

Economists have been troubles while assessing the taxation burden in Georgia. The former ruling United National Movement (UNM) has left a messy situation in the country in this regard. In January 2005, the UNM introduced a tax code claiming that the total taxes in the country were not higher than 22-24%. However, in reality, entrepreneurs had to pay more. There were different amendments, regulations, normative acts and similar changes which created a complicated, often confusing taxation system in Georgia, which in reality had deteriorated the situation of businesses.

The Georgian Dream administration inherited a big mess to sort out in this regard. Unfortunately, the situation is not clear as of yet, although the new administration is trying its best to find a solution. It is known that PM Ivanishvili highlighted the importance of supporting small and medium sized businesses, which suffer most while facing the confusing taxation system.

In this regard, economists suggest two scenarios of development in the Georgian economy– they provide a pessimistic prognosis, suggesting that if the internal political situation is further aggravated, the economic growth of the country will be around 3%; while according to the optimistic assessment, if the political situation stabilizes in the country, it can attract investments and thus economic growth in the country might increase and rise to 5.5%, which will help the country continue in its development.