Following aggressive campaign, Albanian gov’t promises tax relief for 83,300 SMEs

Tirana Times
By Tirana Times November 20, 2015 11:25

Story Highlights

  • The Albanian prime minister said the tax cuts were a result of the positive effects from the nationwide campaign against tax evasion which since July 2015 has formalized thousands of businesses and informal workers.

Related Articles

Prime Minister Edi Rama made the comments at a meeting with SME representatives on Monday. (Photo: GoA/Facebook)

Prime Minister Edi Rama made the comments at a meeting with SME representatives on Monday. (Photo: GoA/Facebook)

 

TIRANA, Nov. 17 – In the midst of an aggressive nationwide campaign against widespread informality, the Albanian government has made a major concession, offering tax cuts to small and medium-sized enterprises, many of which will no longer have to pay any profit tax.

Some 83,300 small businesses with an annual turnover of up to ALL5 million (€36,000), accounting for 85 percent of total enterprises, will benefit from the removal of the profit tax, Prime Minister Edi Rama said in a meeting with SME representatives this week.

The changes are part of the 2016 fiscal package and are expected to become effective starting Jan. 1, 2016.

Under the proposal, businesses with a turnover threshold of ALL5 million to ALL8 million (€57,000) will also have their profit tax reduced to 5 percent, down from a current 7.5 percent.

Currently, micro businesses with an annual turnover of up to ALL2 million (€14,370) pay a fixed annual figure of 25,000 lek (€180) in profit tax, compared to 7.5 percent for a turnover of 2 to 8 million lek (€14,370 to 57,484) and a corporate income tax of 15 percent for a turnover of more than 8 million lek.

The Albanian prime minister said the tax cuts were a result of the positive effects from the nationwide campaign against tax evasion which since July 2015 has formalized thousands of businesses and informal workers.

“In addition to these changes, all businesses with an annual turnover of up to 8 million lek (€57,000) will continue paying social security and insurance contributions, use cash registers and issue tax receipts based on legislation in force,” said Rama.

The concessions come after several protests by small business representatives opposing new higher fines of up to 50-fold on tax evasion and the installation of costly cash registers.

 

Tirana Times
By Tirana Times November 20, 2015 11:25