According to preliminary budget execution data from the Ministry of Finance’s Treasury Service, Georgia collected GEL 10.6 billion in tax revenue during the first six months of 2025, slightly exceeding the target by 1%. However, profit tax collection fell significantly short, missing the planned amount by GEL 100 million.
The six-month target for profit tax was GEL 1.55 billion, but actual revenue amounted to GEL 1.45 billion, representing a 9% shortfall and a 16% decline compared to the same period in 2024.
Tax Breakdown: January–June 2025
The performance of individual tax categories is as follows:
- Value-Added Tax (VAT): GEL3.8 billion – up 7% year-over-year
- Income Tax: GEL 3.7 billion – up 13%
- Profit Tax: GEL 1.45 billion – down 16%
- Excise Duty: GEL 1.18 billion – unchanged
Despite the underperformance in profit tax, the overall tax collection slightly exceeded expectations, reflecting a strong economic environment supported by 8.8% real GDP growth in the first five months of 2025, well above the government's 6% forecast.
The Ministry of Finance explains that the surge in economic growth this year is largely attributed to the IT sector, where turnover has significantly increased. However, much of this sector is taxed under preferential regimes, meaning the boost in economic output has not directly translated into higher tax revenues.
For the full year, the government aims to mobilize GEL 21.9 billion in taxes, an 8.3% increase compared to 2024. The shortfall in profit tax will need to be offset in the second half of the year to meet the annual revenue target.
As economic activity continues to evolve, particularly in digitally-driven sectors—the government may need to reassess fiscal assumptions and tax structures to ensure sustainable revenue collection amid structural changes in the economy.
