Sectors & markets

Business and Tax Perception Surveys Presentations

Tax in Georgia

Business and Tax Perception Surveys Presentations

16 October 2019

In her welcoming speech, Director of Office of Economic Growth spoke about G4G (Governing for Growth) five-year USAID project, which will end by the end of the year, designed to support improvement of business enabling environment in Georgia.

First Deputy Director of the Revenue Service (RS) made a small introduction about the presentation regarding attitude toward tax system and the importance of the survey.

Attitude toward tax system in Georgia

Presented by Mrs. Mariam Kapanadze, ACT Project Manager

Purpose of business and population survey:

Measuring the trust toward the RS and state institutions; awareness, engagement and attitude towards tax legislation and the tax system; awareness and evaluation of services offered by the RS.

-1,472 small, medium and large compagnies have been interviewed based on stratified random sampling.

-1,008 people have been interviewed based on random sampling.

-Evaluation was done on 7 point scale where 7 is the most positive answer and 1 - the most negative.

Main findings of business survey:

• Business globally trust state institutions, including the RS, with notes 5 and 6
• Primary source of information regarding the tax law is the RS website (46%), followed by accountant (27%) and finally, television (17%). Comparative analysis showed that the percentage of businesses getting informed about the tax regulations using the RS website has decreased in 2019 compared to 2015 and the number of businesses getting the information from their accountants has increased significantly.
• 33% of the interviewed businesses, Individual Entrepreneurs (IEs) and companies, declared that they would like the number of taxes decrease.
• The mostly used services provided by the RS are the RS portal (77% of compagnies and IEs are using it) and Service Centres (71%). The services which are less used are RS car service and the service Privé (only 1% of companies and IEs are using it).
• All the services provided by the RS got notes 6 or 7. Comparative analysis on assessment of satisfaction with the RS services between 2015 and 2019 didn’t show significant changes.
• Only 18% of companies and IEs declared that they usually attend open door days organised by the RS. However, 86% declared that they will surely attend them in the future.

Main findings of population survey:

• Citizens trust the most the Ministry of Justice (note 5). The RS got the note of 4 together with the government and Ministry of Finance and the Court got the note of 3 together with Ministry of Economy and the Parliament.
• The main source of information on tax issues is television.
• 39% of population have not paid any type of taxes. The most paid tax in 2018 was PIT (personal income tax)- 37%.
• Level of awareness on tax rates is very low.
• Level of awareness on property tax is also very low. Only 8% of interviewed know that they must pay the tax if their income is 40 000 GEL per year or more.
• 48% of interviewed do not know what the RS main functions are and 31% consider that tax control (administration) is the main function of the RS.
• Only 18% of the interviewed declared that they use various services provided by the RS and the most used service is Service Centers.

Business perception survey

Presented by Mr. Dustin Gilbeath, Caucasus Research Resource Center

Purpose of the survey:

Track and measure awareness of reforms, relations with Media, attitude towards the business environment, audit and tax administration, pension reform, etc.

-1,053 representatives of medium and large business interviewed

-Average margin of error 1.6%

Main findings of the survey:

• Attitude towards the business environment are relatively stable.
• Awareness of economic reforms is growing, 86% in 2019 against 76% in 2016.
• Primary source of information on current affairs in Georgia is Internet (increasing trend compared to last years).
• Businesses are most aware of tax reform (71%) and pension reform (60%).
• Businesses are aware of the new pension reform and are generally supportive, but their support has declined since its implementation.
• More businesses find the business associations ineffective than effective.
• Findings are promising regarding the Estonian Tax model (most compagnies declared that the new corporate income tax regime had positive influence on the business), but the study did not generate definitive data on whether it is in fact working.