How Georgia’s strengthened tax system is helping entrepreneurs
Darejan Berdzenishvili had a dream.
She would return from Tbilisi to her hometown in Guria with her husband Achinko and dog Rocky to start a dried fruit business.
However, Guria is one of the poorest regions in the Republic of Georgia, and Darejan lacked the funding to start her business.
After Georgia declared independence from the Soviet Union in 1991, the country faced years of instability and poverty. Though visitors now see many abandoned buildings in the region, it is lush with vegetation and beautiful sights with the potential to thrive once again.
The Silk Road once passed through the village Khidistavi, connecting Europe and Asia. Caravans used to stop here to hold fairs, sell European and Asian products, and buy local goods.
Darejan heard about a Georgian Government grant program and applied.
The program was one result of Georgia’s efforts to strengthen its tax system, so that the government could increase spending on programs and services to benefit its people.
USAID experts supported the Georgian Government in this effort, known as domestic resource mobilization.
Darejan received the grant she needed to buy fruit-drying machines. She returned to her hometown Guria and started her business, which she named “Skiji,” the old Georgian word for dried grapes. “It gave me a chance,” says Darejan.
In Guria, Darejan cultivated a large garden, which produces apples, raspberries, watermelons, blood oranges, mandarins, kiwis, blueberries, tomatoes, cherries, melons and mint.
Darejan also buys fruit from neighbors.
“There is so much fruit in the village, natural fruit, without added chemicals.”
She employs people from the community to prepare the fruit and package it, using handmade baskets that she buys from a local woman.
“People in my village, and in general, people of Guria are my family.”
“We are the first pioneers. People will definitely take after us,” says Darejan.
“When we first took our products, we gave most of it for free,” Darejan said. “We wanted people to taste and promote it. It worked.”
Skiji now sells in stores throughout the country and has international interest. “Skiji has reached a new stage,” she said. Darejan will soon need to ramp up production.
Darejan and Achinko want to see many more businesses open in Guria to bring employment to the region.
The business renewed a sense of hope for Darejan and her family. “Skiji allowed me to return to my village, to my home where I feel happy.”
USAID provides domestic resource mobilization expertise to more than 15 countries. The process does not necessarily mean new taxes or higher tax rates. Governments often see their revenues rise though improved audits or simplified filing processes.
As an Addis Tax Initiative founding member, the U.S. Government is committed to helping countries strengthen tax systems, mobilize public and private sector revenues, and become more self-reliant.
Georgia now collects resources from its citizens more efficiently and reinvests in Georgian programs and services.
From 2004-2017, Georgia’s state budget revenues increased by about 800 percent. The World Bank’s Doing Business Report identified a tax e-payment system as a contributor to Georgia’s impressive standing and improved economic outcomes.
USAID’s Governing for Growth project, implemented by Deloitte Consulting, provides domestic resource mobilization support in Georgia.
Photos and video by Thomas Cristofoletti for USAID
