10.36172/EKONOMISTI.2021.XVII.02.SHAINIDZE

Resume. One of the important components in the tax administration system is informing the taxpayers by the tax authorities. According to the Tax Code of Georgia, the obligations of the tax authorities clearly define the list of measures to be taken by them to inform the taxpayers. The aim of the research is to review, analyze, evaluate the effectiveness of the means defined by the law on taxpayers in Georgia and to develop relevant recommendations.

Georgian tax legislation defines three main means of informing the taxpayer: a written explanation, a public decision and a preliminary decision.

A written explanation has a recommendatory nature, besides it has no binding legal force and, therefore, it is not an effective means of informing taxpayers that will be  guarantee for the taxpayer to  proper fulfillment of tax obligations.

The public decision is issued by the order of the Minister of Finance, it promotes uniform approaches to the issue under consideration, therefore it has binding legal force and so it is indeed an effective means of informing, but inspite of it there have been only  four public decisions issued so far. Thus, the state does not actually use this important tool to improve tax administration.

The issuance of a preliminary decision is initiated by the taxpayers themselves, it has binding legal force and can make a significant contribution to the proper fulfillment of tax obligations, but it is an expensive service and thus it is less accessible for low-income taxpayers.

Among the means of information there is also a  service of a personal tax advisor, who helps  the taxpayers in the proper fulfillment of tax obligations, but it is  not free service so  and the rate of use of this service by taxpayers is quite low.

Various instructions and methodological guidelines are issued by the Minister of Finance and Revenue Service of Georgia to inform taxpayers, but  they do not contain detailed explanations of the vague articles of the Code.

In recent years, the Revenue Service has intensively used the modern means of electronic communications, open house days, mobile service center services at various locations, and the  payers are informed in advance about all of these, however, the activity of payers in these events is very low. Electronic means of communication are mainly used by taxpayers with high tax culture, the number of which is quite low in our country.

Based on the results of our research, we consider  that the most effective means of informing taxpayers is the publication of official explanations by the Revenue Service on various aspects of the Tax Code, which are published on the website of the Legislative Herald of Georgia. It explains various legislative norms using practical examples. However,  this method is used only in relation to a few articles of the Code so far.

Thus, the most effective means of informing taxpayers provided by Georgian legislation are mainly adjusted to large (high-income) taxpayers and contain less leverage to support medium and small taxpayers, thus violating the principles of universality, fairness and efficiency of information. Free media is either ineffective or has a low taxpayers activity rate.

We can say that the existing means of information do not have a significant impact on the proper fulfillment of tax obligations by taxpayers. In our opinion to take the following measures to remedy this situation and increase the effectiveness of this essential element of administration is important:

-  To establish and develop the practice of issuing public decisions, thus ensuring that all types of taxpayers have equal opportunities to carry out their activities and fulfill their tax obligations in compliance with the legislation;

- To offer free pre-decision and personal tax advisor services to the  newly registered taxpayers for the first two years, bringing incubator activities within the right legal framework and helping them  to find the right development path;

- To increase the popularization of integrated media to increase the rate of their use by taxpayers;

- To issuance of explanations of the Revenue Service in relation to more norms of the Tax Code, which best adapts a specific article to practical examples to help the taxpayer to properly understand and apply the rules of taxation.

Keywords: informing taxpayers, tax culture, efficiency of existing levers, improving administration.