The 2020 Fiscal Package

Tirana Times
By Tirana Times September 2, 2019 08:20

The 2020 Fiscal Package

TIRANA, Sept. 2- World Bank and International Monetary Fund reports have claimed that Albania’s economic system is 50 percent informal. VAT collection resulted lower than planned for the first quarter of the year, which made the Prime Minister to dismiss the director of the General Tax Directorate Enton Duro only three months after his appointment, and appointed  Delina Ibrahimaj instead. Following, the Ministry of Finance and Economy undertook an anti-informality action plan. Thousands of businesses were checked for law compliance, in about 40 percent were found irregularities, and tens were closed.

In order to tackle the issue better, the Ministry of Finance has proposed a new Fiscal Package bill. The draft law is being revised with interest groups and will pass on the Parliament for approval after Sept. 15. The package foresees that each service invoice from businesses to clients will be electronic, in order to lower fiscal evasion, and by 2021, business-to-business electronic invoices will be fully implemented.

In August 2018, the National Intelligence Agency opened a tender for a system where the direct beneficiary would be the General Directorate of Taxation. At that time, this system to be set up was known as the Invoice Management and Control System. A few months later, this tender was won by Croatian company NEOS. The limited fund for setting up the system was then estimated at 15 million euros, but it was not clear at the time what this project and system was.

At the end of July this year, the government announced what is being touted as fiscal reform. It is the same system already set up by NEOS in Croatia, and it is expected to become operational in January 2020 for the first phase related to cash transactions between consumer and business. And as the system is ready, what needs to be approved to make it operational is the legal part. Currently, the Ministry of Finance and Economy has begun discussions of the draft “On the bill and the circulation monitoring system”, to get the opinions of stakeholders, where a number of questions have arisen regarding how this draft law was conceived.

Various stakeholder groups have put forward various questions in an attempt to make corrections or clarifications to the draft that, after consultation and possible reflection of the changes, is expected to be adopted in October. The first to set up consultations were accountants, followed by representatives of the Information Technology Associations.

“I see the draft as positive, as the more technology we have, the less it has to deal with corruption, the less there is interference in the profession by informality,” accountant Artan Alia said. He is optimistic that it will reduce waiting time for financial reports and that the accountant will become digital. However, he stated in an interview with the economy magazine Monitor that some definitions regarding service-based businesses, such as transportation businesses, are unclear how they will operate. Another major issue is the debit and credit card payment system. Albania is still behind in that perspective and it is yet unclear how it will be well implemented, along with the cheque system. The bill aims to limit cash money usage. Alia raises the question of how effectively will all businesses declare their daily turnovers in their banking accounts. 

Since announcing the project, the government would point out that fiscalization will have some criteria that businesses need to meet to make the reporting system operational. The key platform is already ready, while it is up to the business to register, and the first condition is that of a digital firm approved by the National Information Society Agency, which has a cost of 4000 lek per year and then the completion, according to as needed, of hardware and software. Only businesses with less than 2 million lek yearly turnover will be excluded from this expense.

At an early stage, the Ministry acknowledged that some fiscal cash registers may not be adapted to the new functionalities required by the new traffic monitoring platform, so businesses may have to make alternative choices. “For all those who would not want to use a fiscal register, there is the possibility of computers and cell phones. We will be negotiating with software development companies to create one for the new fiscal system that will be made available to businesses.

These companies can be licensed by the General Directorate of Taxation, with the approval of the National Agency for Information Society and the aim is to have an open market. Through the protocol they give us, they will create this software and provide it to the business. The idea is that by opening up the market and having as many companies on the market as possible, we can achieve a ceiling price of between 60 and 80 euros per year for sofa. It will be downloadable as an app on a smartphone and the invoice will be printed via a fiscal printer,” the Ministry declared.

Regarding costs, the group of accountants in the consultative meeting said that although the platform will be covered by the state budget, some software solution or communication system, are new costs for the entities. It remains unclear whether the electronic billing device will be an extra cost, if the electronic device for issuing the accompanying fiscal memory invoice for recording fiscal data on the associated invoices will incur additional costs if it also costs the fiscal printer to issue invoices through the electronic billing device, or to issue the accompanying invoice, if the fiscal printer is not part of the electronic billing device.

Potential costs include any electronic equipment such as a computer, mobile phone, etc., used to compile and issue invoices for the sale of goods and to provide cashless payment services or software solutions along with a communications system between the taxpayer and the tax administration through a secure network for electronic data transfer via the Internet. In the final is the electronic signature that is defined in accordance with the law “On electronic signature and the law “On electronic identification and trusted services,” which can also be costly.

 

Tirana Times
By Tirana Times September 2, 2019 08:20