TIRANA, Oct.1- The new law proposed for taxation procedures has reopened the painful debate between the administration and the Albanian business community. A special article of the proposed draft has particularly concerned businesses, as it deals with alternative evaluation practices. Entrepreneurs have objected to the idea of giving the tax authorities the right to reverse the estimation done by businesses themselves. This position has been defended by the head of the Chamber of Commerce of Tirana , Gjok Uldedaj, who explained that article 86 of the new law dealing with estimation of taxes explicitly violates one of the main principles of modern taxation procedures, that business performs its own taxation estimations. The law, on the other hand, has been defended by Finance Minister, Ridvan Bode, who said that self-estimations will be reversed only if the taxations authorities have serious doubts on their accurateness. Uldedaj responded to this claim by contradicting, in general, the excess authority given to taxation authorities who now have the potential to encroach upon business in an unforeseen abusive and corrupt way.
The use of alternative evaluation methods in calculating tax obligations is a common practice when there is a serious doubt that taxpayers have hidden relevant information, faulty documentation, price manipulation, cash transactions reported, or obstacles raised to tax authorities during auditing procedures.
Problematic price declarations
Finance Minister Bode has explained that there is a problematic realm in the field of price declarations. He called upon construction industry entrepreneurs to reconsider what bills they present for their raw materials. “Massive evasion is possible, not due to misreporting of quantity but of price, Bode explained. To address this issue, he called for the creation of a specialize structure inside the General taxation directory that will deal exclusively with market research to evaluate real prices and compare the data in bills and receipts. This will be done for wholesale and special sale prices. The head of the Construction Industry Association has raised the concern to the Minister that prices are very dynamic and while construction goes on they might fluctuate deeply. Kika asked how prices would be evaluated in this changing context and through what practices. The new law is still in the consultation phase where interest groups can provide their feedback. It will be brought before Parliament on January 1, 2008.
