On Some Problematic Issues of the Tax System Development and Tax Culture Formation in Georgia
Authors: Uplisashvili Guram 
Published: January 2024

The presentation focuses on development issues in tax system of Georgia and the formation of tax culture. Forms of relations between tax administration bodies and taxpayers are part of the tax system. The results of the functioning of the tax system depend not only on the tax legislation and the quality of tax administration, but also on citizen mindsets, their law-abiding behavior, their readiness for the established tax burden, and public tax culture. It goes without saying that different societies differ from each other in their specific tax culture. A necessary condition for building the tax system of any country is to base it on certain principles. These are the principles of legality, responsibility, uniformity, justice, stability, cost-effectiveness and so on. When building a tax system, attention should be paid to characteristics of the tax culture typical of the local society. The paper discusses some of the problematic issues identified in the process of reforming the tax system of Georgia, which are related to the current stage of tax culture development. We focused on the risks that were identified in terms of writing off tax debts, measures to simplify the procedures for repayment of overpaid tax, as well as increasing the excise rates. Research has shown that these specific measures have negative fiscal conseuences in both the short and long term and have a negative impact on taxpayers' tax morality. We believe that the degree of readiness of taxpayers for the tax burden should be taken into account when planning the reform of the tax system. In addition, tax system formation and tax administration measures should be planned in such a way that by providing the right positive or negative incentives, the motivation of taxpayers and the attitudes of society as a whole will develop in the desired direction in the long term. It is necessary to continue reforming the tax legislation and the administration system under the following conditions: Further simplification of tax administration procedures. Further strengthening of electronic services. Introduction of additional (especially non-tax) regulations for payers is not welcomed; Maintaining low tax rates. Under the conditions of the current level of tax culture, high rates push taxpayers to shadow operations, thereby undermining their sense of loyalty to taxes; Care should be taken in matters of tax debt write-offs. Such precedents, especially those of a continuous nature, distort the motivation of the payers; There is a need to eliminate weak points in tax legislation and administration. This applies not only to the procedures for repayment of overpaid tax, but also to the possibilities of illegally using special taxation regimes and a number of benefits; It is important to establish a perception of the stability of tax practices in society. It is necessary to adhere the principles of the mandatory nature of taxes, regulation by law, uniformity, justice and other principles. Only in this case, public tax culture will develop in the right direction in the long term. Article in Georgian.