The amendment introduced by Decree No. 436 of the Government of Georgia on 23 December 2024 substantially altered the scope of the special tax regime applicable to small businesses in the construction sector. Under the new regulation, self-employed individuals holding small business status who provide construction and repair services to entrepreneurial entities were, in practice, excluded from the benefits of the special tax regime.
This reform has triggered significant debate regarding its tax law legitimacy, economic efficiency, and social fairness, giving rise to sharply divergent viewpoints among policymakers, practitioners, and scholars.
The purpose of this study is to assess the legal, economic, and social implications of the regulation introduced by Decree No. 436, examine its consistency with the fundamental principles of tax law, and explore alternative regulatory approaches capable of achieving the declared policy objectives.
The research is based on the analysis of normative legal acts, comparative legal assessment, and economic reasoning. The findings indicate that the amendment has weakened the capacity of the special tax regime to fulfill its traditional social and economic functions, particularly in promoting employment, self-employment, and entrepreneurial activity. The study demonstrates that the objectives pursued by the state could have been achieved through less restrictive and more proportionate legal instruments.
The paper approaches the special tax regime for small businesses not merely as a fiscal mechanism but also as an integral component of social and employment policy. Such a perspective enables a comprehensive evaluation of the reform and its consequences across legal, economic, and social dimensions.
