The transition to Georgia’s new pension contribution declaration rules has been marked by significant shortcomings, leaving many companies facing fines they argue were unjustified. According to the auditing firm Kreston Georgia, both software flaws and late communication with taxpayers have complicated the rollout of the reform.
Speaking on BMGTV, the company’s managing partner Davit Papiashvili highlighted that more than 1,000 companies have already appealed GEL 500 fines imposed by the Pension Fund, with some cases currently being reviewed in court. In certain instances, he said, the Pension Fund itself has acknowledged its errors and canceled fines.
“This reform was very important, and we had been requesting it since the beginning of the pension reform,” Papiashvili explained. “However, the process was implemented with a number of flaws. Communication with taxpayers happened late, and in several cases, the program itself contained errors, such as the system incorrectly displaying the mandatory 4% contribution. Unfortunately, many companies were unfairly fined as a result.”
He noted that while in some cases employers were at fault, in many others the responsibility lay with the Pension Agency. The discrepancy led to uneven outcomes, some businesses had fines waived, while others were forced to challenge them in court.
Since May 1 of this year, the databases of the Pension Fund and the Revenue Service have been integrated, giving the Pension Fund the authority to fine employers for non-compliance with pension contribution obligations. Legislative amendments also clarified that fines would not apply in cases where companies submitted corrections to their declarations.
According to Papiashvili, a fairer and more transparent system is needed to ensure companies are not penalized for errors beyond their control.
