Browsing by Author "Bukia, Iza"
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Item How to overcome the barriers for enterpreneural activity in Georgia(Ivane Javakhishvili Tbilisi State University Press, 2019) Bukia, IzaA number of actions are being taken to develop and promote entrepreneurship in Georgia. It is expressed both in the development and implementation of various strategies and in tax reform. However, entrepreneurs still face various problems and barriers. 120 entrepreneurs were interviewed. The purpose of this paper is to identify the barriers to entrepreneurial activity and the problematic issues facing them; identifying the gaps in Georgia’s tax system in terms of entrepreneurs and identifying the type of tax with the greatest pressure; also identifying barriers to other non-tax aspects for entrepreneurs. The development of the entrepreneurial environment and the promotion of entrepreneurs are very important for the state. A number of tax reforms have been implemented in Georgia (Introduction of special taxation regimes; the so-called profit tax Introduction of Estonian model; liberalization of tax sanctions; implementation of a United Treasury Code; Automatic VAT refund service) that were adopted to support entrepreneurs, to expand their activities and facilitate their relationship with the tax authority. Nevertheless, entrepreneurs still face certain barriers and problems, which were identified by research. 120 entrepreneurs across Georgia were interviewed; the number of entrepreneurs surveyed by type of activity is as follows: Service (31%), Trade (29%), Production (14%), Construction (11%), Tourism (7%), Agriculture (6%), 1% -1% Energy and Finance sector. The magnitude of the tax rates in force in the country and according to the objects of taxation, Georgia is one of the most liberal countries in the world. But despite that, there is always the desire of entrepreneurs, operate as low as possible tax rates. To fi nd out which tax rate puts them in a big burden, according to interviewed entrepreneurs, the majority of entrepreneurs (58%) want to reduce their income tax. 25% of entrepreneurs want to reduce Value Added Tax (VAT). The next position shows the reduction of excise tax rate (7%). This is followed by a reduction in the profit tax rate (5%). In the last positions are import (3%) and property tax rates (2%). The following problems are the main impediments and problems to the development of entrepreneurship: A) Difficult access to credit resources (35%); B) Market insecurity from counterfeit products (25%); C) Insecurity of business interests by the government (20%); D) High tax rates (20%); The tax system in Georgia and its evaluation by entrepreneurs, what kind of difficulties do they have in this regard, this study identified the following circumstances: 58% of entrepreneurs think that some legislative records are vague and do not provide an accurate explanation; While 27% of entrepreneurs think that the weakness of the tax system is instability;10% think the changes are only for large firms; 5% of entrepreneurs believe that the tax system deficiency is a few of the reasons mentioned above. Given the above, it is clear that despite a number of positive impacts of tax reform, entrepreneurs still face certain barriers and problems. Therefore, when developing economic reforms it is desirable that the problems/barriers of entrepreneurs be taken into account by the government, in order to improve the entrepreneurial environment.Item Strategies, projects and results of the EBRD (European Bank for Reconstruction and Development) in Georgia(Ivane Javakhishvili Tbilisi State University Press, 2018) Bukia, IzaInternational financial institutions have great influence on the development of its partner countries, which is expressed by the implementation of projects in various important directions, such as: Energy, Infrastructure, Industry, Trade, Strengthening Financial Institutions etc. It, in turn, contributes to the country's progress. Georgia actively cooperates with international financial institutions and in this article we will discuss the projects implemented by the European Bank for Reconstruction and Development (EBRD), which are impressive with its scale.Item Supporting tax policy for small business in Georgia(Ivane Javakhishvili Tbilisi State University Press, 2019) Bukia, IzaThere are a number of stimulating actions in the direction of tax policy for entrepreneurs who have an entrepreneurial and especially small business status in Georgia. The status of small business in Georgia was determined by Tax Code and entered into force on 01 January 2011 in order to take advantage of certain preferences for taxpayers who had a relatively low level of income. However, it is noteworthy that after the introduction of the status additional amendment has been made in favor of taxpayers in 2018. However, in this regard we can say that the state budget has lost its revenues and there are also some risk factors that could further reduce the state revenues. On July 1, 2018, the amendment has been made into the Tax Code and the joint revenue margin has increased from 100 000 GEL to 500 000 GEL. While taxable income is taxed by 1% instead of 5%, however, the rate is changed to 3% if its joint income from economic activity exceeds 500,000 GEL. There are about 120 000 entrepreneurs who have small business status in Georgia, therefore, it is important to encourage these taxpayers with different benefits, because quantitative terms are relatively voluminous. As for the risk factors that can be identified after this legislative amendment and that could additionally reduce the tax revenue within income tax, here lies the following: in the field of service, e.g. in a construction business, persons employed in a repair service, they can be granted the status of small business, which does not include the list of prohibited activities, and the employer (in this case the construction company) will no longer be taxed with income tax, instead of 20% (income tax) will be taxed by 1% (small business status). Therefore, we can conclude, it is a big risk that the budget will likely receive less income taxes than it is planned. We can also consider the lack of information as a risk factor, taxpayers with small business status have the right not to indicate the information on the balance, as well as the price tag, etc. Based on the fact that it is an informative character and is not obliged to fill the fields, which in turn will complicate the collection of information about taxpayers (within the scope of small business status) for the Revenue Service and to monitor it accordingly. However, the above-mentioned risk factor (which can affect the tax on income) should be an object of observation in dynamics, since the expected income having been already reduced in the budget, would not be decreased even more.