According to the report by the World Bank and PWC, Georgia is in 16 th place in the world on the 2019 Paying Taxes Index for its simplicity and effectiveness of paying taxes, which assesses the year 2017. The report suggests that among the countries around the world, the total tax and contribution rate saw the biggest decrease in Georgia going from 16.4% to 9.9%. The reason behind this reduction is the net profit tax reform, whereby the corporate income tax is now levied only on distributed profits rather than on all taxable profits. As a result, Georgia went from 22 nd to 16 th place on the index. Hong-Kong is in first place on the index and Venezuela in last. In Venezuela, the total tax and contribution rate amounts to 64.6% of the revenues, the business has to make 70 different payments, and the time required to meet the tax compliance obligation is estimated at 792 hours on average.
In Hong-Kong the effectiveness of tax payments is rated at 22%, with only 3 required payments in total, and the time it takes to prepare the documents and meet compliance obligations is estimated at 35 hours on average. In Georgia, the total tax and contributions rate is 9.9%, the preparation of the documents comes to 220 hours on average, and the number of payments required is 5. Russia is in 53 rd place on this ranking, Azerbaijan in 28 th , Kazakhstan in 56 th , Uzbekistan in 64 th , and Armenia in 82 nd. The tax payment calculation in this report is made based on a hypothetical company, which re-invests 50% of its annual profit, and distributes 50% of its net profits as dividends to the owners at the end of the second year. According to the methodology, this hypothetical company is not a specialized business. Accordingly, in calculating the index, excise tax or license taxes are not considered. This means that Georgia improved its position on the index despite its 2017 Tobacco and oil excise tax increase.
