Peculiarities of Georgia’s tax policy formation in the modern stage (RESUME)

Amiran Tavartkiladze

Georgia’s tax policy and tax system require serious transformation. The passed independence years have demonstrated the fact that Georgia failed to determine tax policy, tax burdens and rates for the new country, new political and economic formation.

An appropriate “tax culture” ? the inner need for obligatory tax payment ? was not formed in Georgia. In the current stage one of possible variants for regulating the issue is reduction of tax-rate. However, priority should be attached to private insurance in the future. One tax should comprise:
a) Tax on the use of natural resources and environmental pollution by harmful substance;
b) Motor vehicle duty and duty on entry to the territory of Georgia in a vehicle
c) Resort and hotel tax;
d) Advertisement tax.
Thus, 4 taxes would be left instead of 8. At the same time, abolishment of the following taxes is considered acceptable: economic activity tax ? there are not similar taxes anywhere. Such taxes are characteristic for countries in the initial or transition period. Transfer tax should be included in income tax.
Thus, 6 taxes can be abolished as a result of unification and abolishment. This will make work easier for both tax-payers and tax collectors. Simultaneously, it is necessary to increase tax payers’ and tax collectors’ duties and responsibilities.
A strong state and budget rely on tax collection on condition of real and obligatory payment and each entrepreneur’s and tax collector’s duties. Analysis of the issue in historical aspect points to the lack of the responsibilities and duties. It is noteworthy that for many years international experts have expressed their discontent on account of imperfect legislature, disorganized tax administration, unstable tax system in the institutional level. The claims were not considered in due time. Scientific economists as well as officials and entrepreneurs will have to admit past mistakes and correct them. In the stagnant country results can be achieved only by joint efforts.