Tax Debt Management Reform in Georgia

The tax debts collection strategy in Georgia is changing from automatic fiscal punishment approach to a preventive measures’ implementation style. Previously, in case of any kind of tax debt, regardless of the amount and the frequency of such cases, coercive measures were automatically activated meaning that all indebted taxpayer’s bank accounts in all banks simultaneously got blocked and the debt amount was automatically withdrawn. In the event where there was not enough money available in the bank accounts, the property of this entity got confiscated.

In 2023 Georgian Revenue Service in association with the World Monetary Fund has developed and started to implement a new project, which is now in active test phase. The project’s concept features categorization of the taxpayers into separate groups through analysis of the tax history of each taxpayer, their tendency to accumulate or to reduce tax debts, debts’ frequency, size, and debt repayment timing. In case the entity has a good taxpaying history, has no tendency to grow tax debts, and occasionally did not manage to pay taxes on time, the fiscal measures will no longer be automatically implemented, instead the taxpayer will be communicated and given a reasonable time limit to resolve this issue as well as this debt repayment schedule could be offered. Instead, if the taxpayer tends to grow his/her tax debts, the drastic measures are activated.

The project aims to distinguish the types of taxpayers, sorting them though their digital tax history, so that good and bad taxpayers were not treated on equal terms.

Implementation of structured telic and objective approaches will contribute to timely debts settlement to avoid the stage where an entity is unable to repay taxes and goes bankrupt. Another purpose this project serves is to relocate Revenue Service resources from inactive, bankrupt entities, or the entities without any property to arrest to those whose debts still can be paid to help them to repay debts without harming or interrupting their business process.

The testing phase of the project will run into the active working stage starting from 2024. After running into full force this project is aimed to reduce the total unpaid debts by 20%.

For further information please contact Ms. Irina Lopatina, Country Executive at our Eurofast office in Georgia, Tbilisi at

Elena Bituskaia
Payroll Specialist
Eurofast Tbilisi