Locally generated and retained fee revenues are one of the best methods for boosting local economies and maintaining tourist infrastructure. A tourism local tax and/or fee is an internationally accepted practice and is paid by non-residents when staying in local tourist accommodations and when receiving specialized services. Additionally, based on the Government of Georgia’s (GOG) stated objective of administrative decentralization, it is important that municipalities obtain a higher level of independence and control over local decisions and finances. To achieve this goal, it is essential to create sources of locally generated revenues that municipalities can use for local needs.

USAID Economic Governance Project developed a report that established the legal feasibility of introducing either a tax or fee. At this stage, it is essential to establish an economic/social viability, to which end the development of a regulatory impact assessment is required. 

Under this subcontract, the ISET-PI team will develop a comprehensive regulatory impact assessment (RIA), including an economic analysis to determine the viability of introducing a tourism local fee in Georgia. 

The ultimate objective of the program’s intervention is to support local governments and, by proxy, the tourism sector to have access to alternative sources of revenue to support maintenance and development of the touristic infrastructure and development of the tourism sector overall.  

The project's objective is to lead the development of an RIA on tourism local fees, including a comprehensive economic analysis that shall include several (at least two) scenarios with various fee rates and bases.