Berisha hints withdrawal from progressive tax

TIRANA, June 7 – Prime Minister Sali Berisha has hinted the government will soon withdraw from its plan of imposing a progressive profit tax for big companies. This was announced on Tuesday during an annual meeting of the European Fund for Southeast Europe (EFSE) in Tirana where PM Berisha described the progressive tax as a Marxist one. Referring to a study by researchers of the prestigious Oxford University, Berisha said it has been proved that for each dollar of lowered corporate tax, “0.54 percent of the profit went to employees, giving an end once and for all to the Marxist dogma of the progressive tax.” Berisha said the group of researchers, which had analyzed 800,000 enterprises in Europe and around the world proved the necessity of low tax policy as the best interest for employees and the society in general. The progressive tax initiative had also been opposed by interest group and financial experts. The Finance Ministry had earlier announced it was drafting a new law that will raise profit taxes for big companies up to 30 percent, changing the 10 percent flat tax system it has applied since 2008 into a progressive profit tax. Finance Ministry sources say the 10 percent profit tax will remain in force only for companies with a profit rate of up to 20 percent. The profit tax for companies with profit rates from 20 to 30 percent will increase to 20 percent, while companies with a profit rate of more than 30 percent will be taxed at 30 percent. A study by the Finance Ministry shows that 15 out of 100 large companies operating in Albania apply profit rates of more than 20 percent. Data show 6 of the surveyed companies had profit rates from 20 to 30 percent while 9 others applied profit rates of more than 30 percent. The law mostly affects banks and telecommunication companies which Prime Minister Berisha had previously stated often charge unjustifiably high tariffs. Speaking on the country’s energy potentials, Berisha said Albania was the only country in the region which could become a 100 percent producer and exporter of renewable energy. He also hinted Albania would quit plans to build a nuclear power plant following the tragedy in Japan and Germany’s decision to close down its nuclear power plants by 2022. Berisha called on the EFSE to support the funding of small and medium-sized hydropower plant construction in Albania, saying that Albanian government had signed concession contracts on 220 HPPs.