Impact of the introduction of the common treasury code into accounting of tax revenues

Thumbnail Image
Journal Title
Journal ISSN
Volume Title
Ivane Javakhishvili Tbilisi State University Press
The more difficult tax compliance is, the greater the risk of tax avoidance and vice versa. One of the key components to improve tax compliance is a simple tax payment system. Simplicity of payment is a part of the “doing business” ratings criteria. From January 2016 Georgia introduced the single treasury code. 101001000 is now the only thing taxpayers need to know to pay their taxes. This new approach has improved the previous system of tax revenue accounting and has subsequently influenced many aspects related to taxes, tax administration and revenue analysis. Before introducing single treasure code, treasury accounts for paying taxes in Georgia were detailed and had a breakdown consisting of regions, tax authorities and tax types (including sub types for each tax, differentiating many types of products and services, sanctions etc.), creating thousands of possible combinations for generating necessary code. On the one hand detailed information may seem convenient and useful for tax revenue analysis purposes, but in fact, without sufficient responsibility and controlling mechanisms at hand, the data may become unreliable. From 2016 taxpayers do not spend their valuable time for selecting necessary treasury code for making tax payments. All responsibility for proper tax revenue distribution comes on Revenue Service of Georgia. Distribution is done on daily basis and is based on taxpayer related data, including tax declarations, personal accounting cards for transactions, registration data etc. Payment of each taxpayer is distributed considering dates of emergence of all recognized tax liabilities (old liabilities are first covered). Results of submitted declarations are also enough grounds for automatic offsets among tax types. These new approaches increased possibilities for proper tax revenue allocation not only among tax types, but also among budgets as well. Introduction of single treasury code should not be perceived as a simple treasury code unification process, but as an important step forward and reform, that made tax compliance simpler and created sufficient grounds for improving tax revenue analysis, tax administration and tax revenue distribution.
• Decree of the Government of Georgia N96. (2010). On Approval of Fees and Rates for Rendered Services by Legal Entity of Public Law Revenues Service (in Georgian). • Law of Georgia N3591-II. (2010). Georgian Tax Code (in Georgian). • Order of Finance Minister of Georgia N1226. (2007). On Approval of Treasury Codes for Budgetary Revenues (in Georgian). • Order of Revenue Service N1205. (2011). Methodological Guidance of Keeping Taxpayers personal Accounting Cards (in Georgian). • Order of Revenue Service N13446. (2016). Methodological Guidance of Keeping taxpayers Personal Accounting Cards (in Georgian). • Revenue Service Report on Rendered Services in 2015.|common/get_ doc.aspx?id=9892 |last view March 26 2019| (in Georgian).
Single treasury code, treasury code, tax payment, tax revenues, payment order
Economics and Business, №2, 2019, pp. 119-128