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Ad title:
National Consultant
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International Labour Organization
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Published: 26 August
/ Deadline: 01 September
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National Consultant/ tax policy assessment
Location: Georgia
Application Deadline: 01.09.2025
Expected Start Date: 15.09.2025
Languages Required: English and Georgian
Contract Type: Individual Consultant
1. Background:
On 13 August 2024, the International Labour Organization (ILO) and its constituents signed Georgia`s first Decent Work Country Programme (DWCP) for 2024-2025, identifying informality as a key national priority. In response, constituents committed to developing a comprehensive National Strategy on Formalization. As an initial step, and with support from the RBSA project, the ILO commissioned a report on informal employment trends, where employers identified Georgia`s tax system as a key driver of informality.
Although Georgia`s tax framework is internationally competitive, its multiple preferential regimes for individual entrepreneurs and small businesses have created unintended incentives for informality. Around 60% of registered businesses are individual entrepreneurs, many of whom limit growth or underreport income to maintain access to exemptions under the microbusiness, small business, or fixed taxpayer regimes. While designed to ease compliance, these systems can discourage hiring, reduce transparency, and complicate enforcement.
In addition, other preferential regimes for enterprises in Free Industrial Zones, high mountain settlements, or specific sectors promote investment but risk distorting competition. Firms outside these regimes face heavier tax and administrative burdens, which may push some towards informal operation. Addressing these dynamics is critical for promoting sustainable formalization in Georgia.
2. Purpose of the Assignment:
The purpose of this assignment is to examine the role of Georgia`s preferential tax regimes in shaping informality and business competitiveness. While these regimes were designed to support small businesses, encourage registration, and ease compliance, evidence suggests they may also create incentives for underreporting, business splitting, and limited growth, thereby sustaining informality.
Through this consultancy, the ILO will provide the Georgian Employers Association (GEA) and other national constituents with an evidence-based analysis of how current tax structures impact enterprise behaviour, labour market dynamics, and competition. The findings will inform policy dialogue and contribute to the development of the forthcoming National Strategy on Formalization, ensuring that taxation and compliance frameworks better support sustainable enterprise growth, decent work, and economic formalization.
3. Scope of Work and Specific Objectives
The present research aims to assess the impact of Georgia`s preferential tax regimes on business formalization and competitiveness, specifically on MSMEs. It aims to understand how current tax policies shape enterprise behaviour, compliance, and growth trajectories. The objective is to examine the structure, design, and implementation of these regimes to identify unintended incentives for informality. The overall goal is to generate actionable insights that can inform reforms in tax policy to promote fair competition, foster formalization, and align with broader socio-economic objectives. Specifically, it will:
** Provide a comprehensive overview of existing preferential tax regimes, identifying how their design and implementation may unintentionally incentivize informality among MSMEs through inconsistencies, threshold misalignments, and administrative loopholes.
** Analyse the competitive imbalances emerging from the current tax structure, and the implications for enterprises operating outside of preferential regimes.
** Map patterns of enterprise behaviour, including how entrepreneurs underreport turnover, restructure operations, or otherwise adapt to remain eligible for preferential regimes.
** Evaluate compliance challenges associated with these regimes—such as reporting requirements, administrative burdens, and enforcement practices—and how they influence business decisions on formalization and growth.
** Examine the underlying reasons why many enterprises choose to limit growth, exploring whether this is driven by fear of regulatory complexity, lack of finance, lack of business support services or lack of awareness.
** Analyse the disconnect between preferential tax regimes and access to social benefits, such as unemployment protection, pensions, and health insurance, and how this currently weakens the incentives for formalization.
** Develop evidence-based recommendations to inform the design of Georgia`s National Strategy on Formalization, regarding ways in which preferential tax policies can be reformed to support sustainable enterprise growth, fair competition, and broader social protection goals.
4. Deliverables and Timeline:
** Methodological note: A detailed research methodology will be prepared, including a workplan, timeline and proposed data sources.
** First draft report: A full draft of the analytical report will be submitted, incorporating findings from the desk review, regulatory and policy analysis, data analysis and stakeholder consultations. The draft will be validated with members of the GEA.
** Final report: A revised final report (up to 50 pages) will be delivered, integrating feedback from the ILO and GEA. The report will present a comprehensive analysis and evidence-based policy recommendations to inform the National Strategy on Formalization.
** Presentation of findings: A presentation summarising the main findings and recommendations will be prepared and delivered at the launch event.
** The activities will start on 15 September 2025 and are due to be finished by 31 October 2025.
6. Consultant Profile:
The contractor should meet the following qualifications:
** Advanced degree (master`s or Ph.D.) in a relevant field such as economics, public policy, public finance, or a related field.
** Proven expertise in tax policy, with a specific focus on MSME taxation and its implications for business formalization and compliance.
** Strong research and analytical skills, including the ability to carry out both qualitative and quantitative analysis (e.g., use of administrative data, survey design and analysis, stakeholder interviews).
** Experience working in or with transition or Eastern Partnership countries is highly desirable. Familiarity with Georgia`s business environment, institutional context, and policy landscape will be considered a strong asset.
** Excellent written and verbal communication skills in English. Proficiency in Georgian is an advantage.
Submission of Applications:
Interested candidates are invited to submit the following documents to klimiashvili@ilo.org, sikharulidze@ilo.org:
** CV detailing relevant qualifications and experience.
** Short financial and technical proposal.
** Only shortlisted candidates will be contacted.
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