TIRANA, March 7 – The Albanian government is working to establish a Business Ombudsman as a new body to settle disputes between the business community and the government in a bid to improve the business climate after a blow in the latest Doing Business Report.
The Ombudsman, first announced by Prime Minister Edi Rama in an EBRD Western Balkans Investment summit in London last February will act as a bridge between the government and the business community to handle complaints and provide a solution to them.
“We strongly believe that this new authority which will considerably reduce time for the business community will create a very important bridge between the government and businesses to provide quick solutions in case of misunderstandings or issues that could arise,” Rama said.
The establishment of the new body is being supported by London-based EBRD which in 2015 also helped set up, the Albanian Investment council, an institution with the goal of enhancing public private dialogue and spurring concrete action to strengthen the business climate in the country.
In a meeting with business representatives last week, new Economy Minister Milva Ekonomi, said the new Business Ombudsman body will handle complaints and provide solutions but also put pressure for legal changes.
The Albanian government has set up a working group to improve some of the country’s key indicators in the flagship Doing Business report published by the World Bank.
Reducing time and costs to start a business, improving access to construction permits, electricity, property registration and loans are some of the main indicators the Albanian government is working on.
However, the rising tax burden and delays in administrative court proceedings remains key concerns for businesses.
The Tirana Chamber of Commerce says the new tax on the infrastructure impact for new constructions in Tirana has increased 15-fold from 4 percent of the construction cost to 8 percent of sale prices, with a negative impact on the ailing-construction sector.
Meanwhile, the Business Albania Association says the small staff in administrative courts is delaying examination by more than one year.
Albania’s business climate suffered a major setback in the past year, losing 35 places in the World Bank Doing Business report on a sharp deterioration in dealing with construction permits.
Albania ranked 97th out of 189 countries in the 2016 Doing Business report, from a revised 62nd last year, lagging behind all regional countries.
Since 2014, the corporate income tax and the withholding tax on dividends, rents and capital gains have increased by 5 percent to 15 percent, making the tax burden in Albania one of the region’s highest.
Albania registered the greatest increase in the total tax rate among 189 countries in 2014 when the rate of the corporate income tax increased by 5 percent to 15 percent and the property tax doubled, according to the 2016 Paying Taxes report published by the World Bank and the PwC audit firm. The report shows Albania lost 11 places to rank 142nd with a total tax rate as a percentage of commercial profit of 36.5 percent, up from 30.7 percent in the 2015 report.
