Editing Economy of Georgia (country) (section)

==Institutional reforms==

Under the [[Saakashvili]] administration, Georgia undertook a number of profound institutional reforms aimed at modernizing the economy and improving the business climate. [[Kakha Bendukidze]] (1956–2014) was one of the most notable team members during his governance, coordinating the Ministry of Economical Reforms of Georgia. Implemented institutional reforms created an effective, professional and transparent public sector, motivated to protect the principles of democracy. Due to the economic deregulation policy, number of state regulated spheres sharply decreased, as well as regulation procedures were simplified.

Georgia succeeded in fighting against corruption, that was one of the main obstacles for development. The success of Georgia is recognized by different rating agencies. According to the Transparency International, Georgia is the top country in the post-Soviet region in terms of fighting corruption. According to the [[Corruption Perception Index]] published by [[Transparency International]], Georgia ranked 50th in 2014<ref>[http://www.transparency.org/cpi2014/results Corruption Perceptions Index 2014] {{Webarchive|url=https://web.archive.org/web/20151202072021/http://www.transparency.org/cpi2014/results |date=2015-12-02 }}. Transparency International.</ref> (up from 113rd in 2004).<ref>[http://www.transparency.org/research/cpi/cpi_2004#results Corruption Perceptions Index 2004]. Transparency International.</ref> "Global Corruption Barometer 2010" ranks Georgia the first among world countries in the term of decreasing corruption level.<ref>[http://www.transparency.de/fileadmin/pdfs/Wissen/Korruptionsindices/GCB_2010.pdf Global Corruption Barometer 2010] {{webarchive|url=https://web.archive.org/web/20120601172132/http://www.transparency.de/fileadmin/pdfs/Wissen/Korruptionsindices/GCB_2010.pdf |date=2012-06-01 }}</ref> According to [[International Finance Corporation]] Business Perception Survey 2012, only 0.11% of surveyed (1 respondent out of 920) named corruption as a problem in relations with public organizations.<ref>Georgia Business Perception Survey 2012. International Finance Corporation. [http://www.ifc.org/wps/wcm/connect/5eed4c004af40f7c8a8efa888d4159f8/Georgia_BEE_Survey2012_EN.pdf?MOD=AJPERES pdf]</ref>

Georgia has the most liberal tax jurisdiction in Europe. The number of taxes is decreased from 21 to only 6, tax rates were reduced also. In addition, significant procedural and institutional reforms were implemented – simplified system of tax disputes was established, tax administration system was streamlined and most of the taxes currently are paid on-line.

Due to the customs reform, customs procedures were dramatically simplified. Customs tariffs reform significantly simplified and sharply reduced the costs connected to the foreign trade. The number of import tariffs was abolished on approximately 90% of products and only 3 tariff rates exist instead of the previous 16. Currently, 86% of tariff lines are duty-free compared to 26% in 2005. Modern Customs Clearance Zones were established and customs clearness procedures could be made starting from 15 minutes only.

Modernization of the system of licenses and permits resulted in decrease in the number of licenses and permits and simplification of related administrative procedures.

Privatization of state property – Starting from 2004, provision of a transparent privatization policy was one of the important reforms of the Government of Georgia, that was addressed to denationalization of the remained state property in order to attract foreign investments, increase and develop the private sector and effective use of country's resources.

Liberal labour legislation simplified the relations between employers and employees. As a result of the reform, ”Heritage Foundation” and other analytical centers named Georgian Labour Code as one of the most liberal in the world because it significantly reduced hiring and firing expenses.

Georgia offers the most simplified procedures for registration of business, property, for getting different documentations via “One-Stop-Shops”, where the most procedures could be done on-line. [[Ease of doing business index|Doing Business]] 2012 report [[World Bank|(WB)]] places Georgia 16th in terms of [[Ease of doing business index|Ease of Doing Business index]] (up from 112 in 2006), naming Georgia as the top reformer amongst the 174 countries over the last 5 years. Georgia is amongst the leaders in other ratings, namely, registering property – first place; Dealing Construction Permits – 4th place, starting a Business – 7th place; Getting Credits – 8th place.<ref>{{cite web|url=http://www.doingbusiness.org/reports/global-reports/doing-business-2012|title=Doing Business 2012 – Doing Business in a More Transparent World – World Bank Group|work=doingbusiness.org}}</ref>

===Licensing regulation===

Due to the reform of the system of licenses and permits, the number of licenses and permits was reduced by 90%. Currently, licenses and permits are only used in the production of highly risky goods and services; also usage of natural resources and specific activities. The procedures of issuing licenses and permits were significantly simplified, the “One-Stop Shop” and “Silence is Consent” principles were introduced which implies that if a person is not notified with argumentation rejection about the issuance of license in limited framework, the license is considered as issued from the relevant body.

The procedures for getting a construction permit was dramatically simplified, and it requires just 3 procedures. The time for getting the construction permits was sharply reduced. According to Doing Business 2012 (WB) Georgia is the best performer in the Eastern Europe and Central Asia (ECA) region and places on 4-th position in the world. The number of procedures and days, the cost (% of income per capita) is much lower, than in ECA region and OECD countries.

Things have changed after the new Law on Issuance of [[Licenses]] and permits was introduced in 2005. The approval process for building a warehouse in Georgia is now more efficient than in all EU countries except Denmark.

===Tax collection===
{{main|Taxation in Georgia (country)}}
Since January, 2011 the new Tax Code came into force. It unifies the old Tax and Customs Codes. The new Tax Code increased confidence towards the Georgian tax system and enhanced trust in the Georgian tax authorities, by improving communication between taxpayers and the tax authorities, by protecting the taxpayers’ rights, by making administration more efficient, and by harmonizing the Georgian laws with the best international tax practices and EU directives.

Only 6 taxes exist in Georgia with law tax rates: Income Tax (personal income tax) 20%; Profit Tax (corporate tax) – 15%; Value Added Tax – 18%; Excise – varies; Property Tax up to 1% of the self-assessed value of property; Customs Tax – 0%; 5%; 12%. In addition, significant procedural and institutional reforms were performed, simplified tax dispute settlement, streamlined tax administration decreased the time and cost of paying taxes. Georgia made paying taxes easier for firms by simplifying the reporting for value added tax and introducing electronic filling and payment of taxes.<ref name="Georgia_Pocket_Tax_Book">[http://mof.ge/common/get_doc.aspx?doc_id=8272 Georgia_Pocket_Tax_Book] {{Webarchive|url=https://web.archive.org/web/20110520055602/http://www.mof.ge/common/get_doc.aspx?doc_id=8272 |date=2011-05-20 }}, [[Ministry of Finance (Georgia)|Ministry of Finance]]</ref>

The number of import tariffs was abolished on approximately 90% of products and only 3 tariff rates (0%, 5%, 12%) exist instead of the previous 16. Georgia sets Import Taxes on only several kinds of agricultural and manufactured goods . In addition, there are no quantitative restrictions (quotas) on imports and exports.<ref name="Georgia_Pocket_Tax_Book"/>

===Labour regulation===

With unemployment around 16% and many jobs in the [[Informal economy|informal sector]], Georgia undertook a far-reaching reform of labour regulation. The new Labour Code was adopted on 17 December 2010. The new law eases restrictions on the duration of term contracts and the number of overtime hours, and discards the premium required for overtime work. It also eliminates the requirement to notify and get permission from the labour union to fire a redundant worker. The new law provides for 1 month's [[severance pay]] at least, replacing complex rules under which required notice periods depended on seniority and the manager had to write long explanations to labor unions and the relevant ministry. In general, new regulations make the Georgian labor market much more flexible.

Coupled with the fact that Georgia also reduced the social security contributions paid on wages by businesses from 31% to 20% in 2005, and abolished them entirely starting January 2008, these changes make Georgia the sixth-easiest place to employ workers globally.

=== Judicial procedure ===

Reducing corruption in the courts was one of the chief priorities of the new government. Since 2004, when the [[Saakashvili]] administration came in, seven judges have been detained for taking bribes and 15 brought before the criminal courts. In 2005 alone, the judicial disciplinary council reviewed cases against 99 judges, about 40% of the judiciary, and 12 judges were dismissed. At the same time, judges’ salaries were increased fourfold, to reduce dependence on bribe money.<ref>{{Cite book|title=Georgia Country Study Guide: Strategic Information and Developments (World Business Information Catalog)|publisher=International Business Publications, USA (2013 Edition Updated Reprinted)|year=2012|isbn=978-1-4387-7443-5|pages=194}}</ref>

According to Global Property Guide index, Georgia currently holds 40 points out of 100.<ref>{{Cite web|url=http://www.globalpropertyguide.com/Asia/Georgia/property-rights-index|title=Property Rights Index in Georgia}}</ref> That stands for "The court system is highly inefficient, and delays are so long that they deter the use of the court system. Corruption is present, and the judiciary is influenced by other branches of government. Expropriation is possible."<ref>{{Cite web|url=http://www.heritage.org/index/property-rights|title=Property Rights: Definition, Economic Growth, Index, Examples|access-date=2015-08-17|archive-date=2020-12-09|archive-url=https://web.archive.org/web/20201209165111/https://www.heritage.org/index/property-rights|url-status=unfit}}</ref>