Georgia is further improving its tax legislation by introducing an automatic system of value-added tax (VAT) returns, which is expected to result in additional surplus capital for the country.
Starting from today a special system will be activated wherein entrepreneurs will be able to pay VAT returns in 5-7 business days by filling out an electronic application without any additional bureaucracy-related challenges.
Georgia’s Finance Minister Mamuka Bakhtadze explained that for launching this special system a proper software infrastructure is needed which will take about six months to be created.
But we wanted our entrepreneurs to feel the benefits as soon as possible that is why we are starting VAT returns in maximally liberal conditions in about five days”, said Bakhtadze.
As a result of the implementation of this reform in the next few years, an additional 600 million GEL will be available in the private sector, which will be an important stimulus for business development. This means that entrepreneurs will be able to reduce the cost of products, improve their quality and become more competitive”, he added.
Bakhtadze stated that the timely and simple return of VAT surplus without any bureaucracy-related challenges is "especially important” for small and medium businesses.
The Parliament of Georgia approved a new, simplified and liberal Tax Code in 2016, however the country’s economic team continues to further modify the tax legislation. The amendments to the law are created to align Georgia’s tax system with the Estonian taxation model.
Following the Estonian taxation model, VAT returns are covered if there is a surplus of VAT inputs over outputs.