Individual Corruption

The tax administration in Georgia has improved in the recent years. According to the Brenthurst Foundation 2009 and Transparency International Georgia 2010, bribery of tax collectors was widespread before the Rose Revolution. However, the introduction of the new Tax Code in 2005, among others, has greatly improved the Georgian tax administration. One of the positive results from tax reforms was a decrease in corruption in the tax revenue services. As illustrated in Transparency International Global Corruption Barometer 2010, a significant percentage of the responding household state that they have not paid a bribe to tax revenue services in 2009. 

Business Corruption

According to Transparency International Georgia 2010, tax avoidance and evasion were pervasive in the taxation system before the Rose Revolution. However, the tax system has greatly improved since Saakashvili came to power in 2004. It used to be one of the most corruption ridden institutions, but now only a small percentage of the companies surveyed in the World Bank & IFC Enterprise Surveys 2008 report corruption in meetings with tax officials. Nevertheless, companies should be aware that demands for facilitation payments are still reported to occur. Global Integrity 2009 reports that tax laws are not always enforced uniformly and without discrimination in Georgia.

Political Corruption

According to the US Department of State 2009, head of the Tbilisi Tax Inspection Unit of the Revenue Service of the Ministry of Finance was found guilty of corruption and forgery, resulting in six years of imprisonment with five years of conditional sentence. The head of the Audit Division from the same unit was also charged with corruption and forgery, and was sentenced to six years and six months in prison with five years of conditional sentence. Both officials were also given a huge fine.

According to the US Department of State 2011, NGOs and opposition members claimed that certain companies and individuals were subjected to searches by tax authorities for political reasons, and they viewed the subsequent fines as a form of 'legal extortion' by the government. NGOs and some opposition members also asserted that in some cases, the authorities used the threat of tax audits as a tool to discourage businesses from contributing to individuals and organisations that are linked to the opposition.  

Frequency

The World Bank & IFC: Doing Business 2012:
- During the course of a year, a medium-sized company can expect to make 4 tax payments and spend 387 hours managing the tax burden at a total tax rate of 16.5% of profits.

Transparency International: Global Corruption Barometer 2010:
- Nearly 96% of households who had contact with tax revenue services throughout 2009 reported that they have not paid a bribe, while the rest preferred not to answer.

The World Bank & IFC: Enterprise Surveys 2008:
- 8.4% of the companies surveyed expect to give gifts when meeting with tax officials.

EBRD & World Bank: BEEPS Georgia 2008:
- 3% of companies surveyed state that bribery is frequent in dealing with taxes.

- 19% of the companies surveyed identify tax rates as a 'major problem' to doing business in Georgia, while 10% identify it as a 'very severe problem'.