|IFC Launch Project to Reduce Tax Compliance Burden for Georgian Businesses|
|September 17, 2010|
Tbilisi, Georgia. IFC, a member of the World Bank Group, in partnership with the Netherlands and Luxemburg, launched an advisory project to support Georgia in reforming the tax system for micro and small enterprises. Reforms will help reduce administrative burden and improve operations for Georgian companies.
Focusing specifically on the needs of micro and small and midsize enterprises, the IFC Georgia Tax Simplification Project will work to lower tax compliance costs by introducing simplified taxes, risk-based audits, more rational use of penalties, and streamlined tax appeals systems. The project also will work to improve public awareness on tax reform and expand outreach to taxpayers.
“Recently, Georgia’s Ministry of Finance and business community have made joint efforts to reform the tax system and further liberalize it,” said Kakha Baindurashvili, Minister of Finance of Georgia. “I would like to thank IFC for their cooperation and help in introducing provisions in the new legislation based on international best practices that will benefit businesses, including small and medium enterprises.”
Georgia has recently undertaken significant tax reforms to ease the administrative burden of enterprises and improve the country’s overall business climate. According to a survey conducted by the World Bank Group and European Bank for Reconstruction and Development in 2008, the share of small businesses reporting tax administration as a major obstacle is several times higher than among medium and large companies.
“The Georgian government is one of the most active reformers in the world and we are happy offer our support and expertise to further improve the country’s business environment for small and medium enterprises,” said Thomas Lubeck, IFC Regional Head, Caucasus.
Georgia became a shareholder and a member of IFC in 1995. Since then, IFC has committed $500 million in 35 projects across a variety of sectors. Since 2003, IFC has implemented comprehensive advisory programs to improve corporate governance and the business climate, particularly for small and medium enterprises, and has recently launched a food safety improvement project.
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in developing countries. We create opportunity for people to escape poverty and improve their lives. We do so by providing financing to help businesses employ more people and supply essential services, by mobilizing capital from others, and by delivering advisory services to ensure sustainable development. In a time of global economic uncertainty, our new investments climbed to a record $18 billion in fiscal 2010. For more information, visit www.ifc.org.
About the Netherlands-IFC Partnership Program
The Netherlands is one of IFC’s key partners in delivering advisory services. The Netherlands-IFC Partnership Program was established in 2002 to consolidate Dutch Foreign Affairs-supported advisory programs under one umbrella. The program is a framework agreement with dedicated funds for IFC’s five advisory services business lines with a focus on activities in the world’s poorest countries. Globally, the Netherlands is one of the world’s largest donors, spending $6 billion, equivalent to 0.8 percent of its gross domestic product.
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