TIRANA, March 22 – Albania’s business climate is perceived to have slightly deteriorated last year after recovering to a five-year high in 2016, with the high level of taxes and government bureaucracy as the main concerns for the third year in a row, according to an annual survey conducted by the American Chamber of Commerce representing some of the key foreign and local investors in the country.
On a 0 to 100 scale, Albania’s 2017 business climate measured by the AmCham dropped by an annual 1.33 percentage points to 42.45.
Monopolies, unfair competition, difficulties in finding qualified staff and high levels of tax evasion were some other concerns identified by businesses surveyed by the American Chamber of Commerce in Albania.
Perceptions on domestic political climate and security in the country also suffered a decline in 2017 apparently fuelled by prolonged political deadlock in the run-up to the June 2017 general elections and incidents involving businesses.
U.S. ambassador to Albania said he was disappointed by the by the decline in the business climate.
“The slight decline in the business index confirms that a lot remains to be done to improve the business climate in the country. Legislation, taxes and regulatory systems should promote sustainable and fair economic development,” Ambassador Lu is quoted as saying.
“Together we can urge the government to implement the necessary reforms and fight corruption,” he adds.
Reducing taxes, settling the long-standing property title issue, increasing transparency in public procurement, lifting reference prices in customs offices and the implementation of a judiciary reform are among the top issues facing businesses in Albania.
Since 2014, when Albania abandoned its 10 percent flat tax regime, 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 the country one of the region’s highest and a top concerns for businesses operating in the country.
Albania is currently implementing a long-awaited justice reform, which has just started with the vetting of judges and prosecutors, in a bid to overhaul the highly perceived corrupt judiciary, a key barrier for Albania’s opening of accession negotiations with the European Union and current and potential new investors.
