Georgia, strategically positioned at the crossroads of Europe and Asia, has established itself as a key player in the regional trade system. Over the past decade, Georgia has focused on improving its trade policies, creating an open and competitive economic environment for both domestic and foreign businesses. Georgia’s custom tariff rates are part of its broader economic strategy to liberalize trade, promote investment, and foster economic development. As a member of the World Trade Organization (WTO) and a participant in various Free Trade Agreements (FTAs), Georgia maintains a relatively low-tariff regime, offering preferential treatment to certain countries and products.
Georgia’s customs regime is characterized by low tariffs on most goods, simplified customs procedures, and several preferential trade agreements with key partners, including the European Union (EU), Turkey, and countries in the Commonwealth of Independent States (CIS). In some cases, special import duties are applied to protect domestic industries or to address unfair trade practices like dumping.
Custom Tariff Structure in Georgia
General Tariff Policy in Georgia
Georgia operates one of the most liberal customs regimes in the region, with low or zero tariffs on many imported goods. The country’s trade policy aims to promote economic growth through open trade while safeguarding local industries where necessary. Georgia’s customs tariffs are regulated by the Customs Code of Georgia and are aligned with the country’s commitments to international trade agreements, including the World Trade Organization (WTO) and various Free Trade Agreements (FTAs).
Key aspects of Georgia’s tariff structure include:
- Zero Tariffs on Most Goods: Over 80% of products imported into Georgia are subject to zero tariffs, especially raw materials, capital goods, and essential consumer goods.
- Ad Valorem Tariffs: For goods that are subject to tariffs, Georgia applies ad valorem rates (calculated as a percentage of the product’s customs value) typically ranging from 5% to 12%.
- Preferential Trade Agreements: Georgia offers preferential tariff rates to goods imported from countries with which it has signed FTAs, including the European Union, Turkey, and China.
Preferential Tariff Agreements
Georgia’s trade policy benefits significantly from a range of Free Trade Agreements that offer preferential tariff rates to certain countries. These agreements include:
- Deep and Comprehensive Free Trade Area (DCFTA) with the European Union: This agreement provides duty-free access to most goods traded between Georgia and the EU, helping to integrate Georgia into the European market.
- Free Trade Agreement with China: This agreement facilitates tariff-free or reduced-tariff trade between Georgia and China, enhancing bilateral trade in goods and services.
- Free Trade Agreement with Turkey: Georgia and Turkey benefit from reduced tariffs on most goods, especially industrial and agricultural products, under this agreement.
- Generalized System of Preferences (GSP): Georgia benefits from preferential access to markets in the United States, Canada, Japan, and the European Union under the GSP scheme, which grants reduced or zero tariffs for specific products.
Special Import Duties and Restrictions
Although Georgia maintains a liberal trade regime, special import duties may be applied under certain circumstances. These include:
- Antidumping Duties: Applied to goods imported at prices below the normal value, which harms local producers. These duties aim to prevent unfair trade practices such as dumping.
- Countervailing Duties: Imposed on goods that benefit from foreign government subsidies, creating unfair competition for domestic industries.
- Excise Duties: Certain products, such as alcohol, tobacco, and petroleum, are subject to excise taxes in addition to standard tariffs.
Product Categories and Corresponding Tariff Rates
Agricultural Products
1. Dairy Products
Dairy products are an important import category for Georgia due to limited domestic production. Tariff rates vary depending on the type of dairy product and its origin.
- General tariff: Most dairy products, including milk, butter, and cheese, are subject to a 5% tariff.
- Preferential tariffs: Dairy products imported from the European Union under the DCFTA or from Turkey under the FTA benefit from zero tariffs.
- Special duties: Antidumping duties may apply to specific dairy products imported from countries where subsidies or unfair pricing practices are detected, particularly in cases of market distortion.
2. Meat and Poultry
Georgia imports a significant volume of meat and poultry products to meet domestic demand. Tariffs are applied based on the product type and country of origin.
- General tariff: Meat products, including beef, pork, and poultry, face tariffs of 5% to 12%.
- Preferential tariffs: Meat imports from the European Union and Turkey enjoy zero tariffs under the respective FTAs.
- Special duties: Import quotas and additional duties may be imposed to protect local meat producers, especially for poultry, in cases of market flooding or unfair competition.
3. Fruits and Vegetables
Georgia’s climate allows for the domestic production of many fruits and vegetables, but the country also relies on imports to meet demand, particularly for out-of-season produce.
- General tariff: Fresh fruits and vegetables typically face tariffs of 0% to 5%, depending on the product.
- Preferential tariffs: Under the DCFTA and other FTAs, fruits and vegetables from the EU, Turkey, and China often enter Georgia duty-free.
- Special duties: Seasonal tariffs may be applied to certain fruits and vegetables during the domestic harvest season to protect local farmers from competition.
Industrial Goods
1. Automobiles and Auto Parts
Automobile imports constitute a large portion of Georgia’s imports, particularly second-hand cars. Tariffs on vehicles are designed to regulate the market and encourage the importation of environmentally friendly vehicles.
- General tariff: Automobiles imported into Georgia are subject to a tariff of 12%, with higher rates for vehicles older than 10 years. Auto parts face tariffs ranging from 5% to 12%.
- Preferential tariffs: Cars and auto parts imported from Turkey and the EU benefit from reduced tariffs or zero duties under FTAs.
- Special duties: Additional excise duties apply to high-emission vehicles as part of Georgia’s environmental policy to reduce pollution and promote energy-efficient transportation.
2. Electronics and Consumer Goods
Consumer electronics, such as smartphones, laptops, and household appliances, are important imports for Georgia, with moderate tariffs applied to these goods.
- General tariff: Consumer electronics face tariffs of 5% to 12%, depending on the product.
- Preferential tariffs: Electronics imported from the EU, Turkey, and China often benefit from reduced tariffs or duty-free access under Georgia’s FTAs.
- Special duties: Certain high-energy-consumption appliances may be subject to environmental taxes in addition to standard import tariffs.
Textiles and Clothing
1. Apparel
Georgia imports a significant volume of textiles and clothing, particularly from Turkey, China, and the European Union. The country applies moderate tariffs on these imports to support its developing textile industry.
- General tariff: Clothing and textiles imported into Georgia are subject to a tariff of 5%.
- Preferential tariffs: Apparel from Turkey and the EU benefits from duty-free access under FTAs, while imports from other countries may qualify for reduced tariffs under the GSP scheme.
- Special duties: Antidumping duties may be imposed on apparel imports from countries where low-cost production distorts market competition, such as imports from China.
2. Footwear
Footwear is another significant category of imports into Georgia, with tariffs designed to protect local manufacturers while ensuring affordable consumer access.
- General tariff: Footwear imports face tariffs ranging from 5% to 12%, depending on the material and type of shoe.
- Preferential tariffs: Reduced tariffs or zero duties apply to footwear imported from the EU and Turkey under Georgia’s trade agreements.
- Special duties: Additional duties may apply to footwear imports from countries involved in unfair trade practices, such as underpricing or dumping.
Raw Materials and Chemicals
1. Metal Products
Georgia imports a wide range of metal products for its construction and manufacturing industries. These imports are subject to tariffs based on the type of metal and its use.
- General tariff: Metal products, such as steel, aluminum, and copper, face tariffs ranging from 5% to 12%.
- Preferential tariffs: Raw materials and metal products from Turkey, the EU, and China benefit from reduced tariffs or duty-free access under FTAs.
- Special duties: Antidumping duties may be imposed on metal imports from countries where market distortions are detected, particularly in the case of subsidized exports from China.
2. Chemical Products
Georgia imports a wide range of chemicals, including industrial chemicals, fertilizers, and pharmaceuticals. These imports are subject to varying tariffs depending on their classification.
- General tariff: Chemical products face tariffs ranging from 5% to 12%, with lower rates applied to essential chemicals used in manufacturing and agriculture.
- Preferential tariffs: Reduced tariffs or zero duties apply to chemicals imported from the EU, Turkey, and other trade partners under Georgia’s FTAs.
- Special duties: Hazardous chemicals may face additional restrictions or duties based on environmental protection regulations.
Machinery and Equipment
1. Industrial Machinery
Georgia imports a significant amount of industrial machinery to support its construction, manufacturing, and agriculture sectors. These imports are crucial for economic development, and tariffs are generally low to encourage investment.
- General tariff: Industrial machinery imports face tariffs of 0% to 5%, depending on the type of machinery and its intended use.
- Preferential tariffs: Machinery imported from the EU, Turkey, and China often benefits from reduced tariffs or duty-free access under FTAs.
- Special duties: Machinery imports from countries involved in unfair trade practices may be subject to additional duties, particularly in cases of subsidized exports.
2. Medical Equipment
Medical equipment is a critical import category for Georgia’s healthcare system, and tariffs on these goods are generally low to ensure access to affordable healthcare products.
- General tariff: Medical equipment, including diagnostic tools, surgical instruments, and hospital supplies, typically faces tariffs of 0% to 5%.
- Preferential tariffs: Medical equipment imported from the EU and Turkey benefits from zero tariffs under Georgia’s trade agreements.
- Special duties: During health crises, such as the COVID-19 pandemic, Georgia may waive tariffs on critical medical supplies to ensure sufficient availability.
Special Import Duties Based on Country of Origin
Import Duties on Products from Specific Countries
Georgia applies additional duties or restrictions on imports from certain countries based on trade practices, market distortion, or geopolitical considerations. Examples include:
- China: Georgia may impose antidumping duties on products like steel, textiles, and electronics from China if they are found to be underpriced or subsidized, distorting the market.
- Russia: While Georgia has significant trade ties with Russia, specific agricultural and industrial products may face higher tariffs or restrictions due to political tensions and trade disputes.
- European Union: Under the DCFTA, most imports from the European Union benefit from zero tariffs. However, products that pose risks to local industries or fail to meet Georgian health and safety standards may face import restrictions.
Tariff Preferences for Developing Countries
Georgia also grants preferential tariff treatment to certain developing countries under various trade schemes. These include:
- Generalized System of Preferences (GSP): Under the GSP scheme, Georgia offers reduced or zero tariffs on imports from developing countries for selected products, particularly agricultural goods, textiles, and raw materials.
Essential Country Facts About Georgia
- Formal Name: Georgia (საქართველო)
- Capital City: Tbilisi
- Largest Cities:
- Tbilisi
- Kutaisi
- Batumi
- Per Capita Income: USD 4,800 (as of 2023)
- Population: Approximately 3.7 million
- Official Language: Georgian
- Currency: Georgian Lari (GEL)
- Location: Georgia is located at the crossroads of Eastern Europe and Western Asia, bordered by Russia to the north, Turkey and Armenia to the south, Azerbaijan to the southeast, and the Black Sea to the west.
Geography, Economy, and Major Industries of Georgia
Geography of Georgia
Georgia is a mountainous country located in the South Caucasus region, with diverse landscapes ranging from the Greater and Lesser Caucasus Mountains to fertile plains and a Black Sea coastline. The country’s geography is characterized by significant variations in elevation, creating distinct microclimates that support a wide range of agricultural activities. The country’s strategic location at the intersection of Europe and Asia has historically made it a vital hub for trade and cultural exchange.
Economy of Georgia
Georgia has a small but rapidly growing economy driven by trade, tourism, and agriculture. Since gaining independence from the Soviet Union, Georgia has implemented significant economic reforms aimed at liberalizing trade, attracting foreign investment, and promoting private sector development. The country’s open trade policy and strategic location have made it an attractive destination for foreign investors.
Georgia’s economy is relatively diversified, with key sectors including agriculture, tourism, construction, and manufacturing. The country is also an important transit route for energy supplies, with oil and gas pipelines running through its territory from the Caspian Sea to Europe. The government continues to prioritize economic modernization and integration into global markets through its free trade agreements.
Major Industries in Georgia
1. Agriculture
Agriculture remains a vital sector in Georgia, employing a significant portion of the population. Key agricultural products include wine, hazelnuts, fruits, vegetables, and livestock. Georgia is especially famous for its wine production, with a rich tradition dating back thousands of years. The government is working to modernize the agricultural sector by improving infrastructure and adopting modern farming techniques.
2. Tourism
Tourism is one of the fastest-growing industries in Georgia, attracting visitors with its diverse landscapes, historical sites, and unique culture. Major tourist destinations include the capital city of Tbilisi, the Black Sea resort city of Batumi, and the ancient cave cities of Uplistsikhe and Vardzia. Georgia’s wine tourism is also gaining international recognition, drawing visitors to the country’s vineyards and wineries.
3. Manufacturing
Georgia’s manufacturing sector is growing, with industries such as food processing, textiles, and construction materials playing an increasingly important role. The government is working to attract investment in the manufacturing sector through incentives and infrastructure development, including industrial parks and free economic zones.
4. Energy
Georgia has significant hydropower potential, and the energy sector is an important part of the economy. The country exports electricity to neighboring countries and has been investing in renewable energy projects to reduce its dependence on fossil fuels.
