The survey, measuring perception among 100 companies in Albania, expects a slight recovery in the business climate for 2014 when the Albanian economy is forecast to grow by 2 percent, down from 0.4 percent in 2013 which was the lowest growth rate in more than a decade.
TIRANA, June 4 – The informal economy, bureaucracy, monopo-lies and unfair competition remain the key barriers to doing business in Albania, according to a survey conducted by the American Chamber of Commerce in Albania.
The survey, measuring perception among 100 companies in Albania, most of which SMEs, expects a slight recovery in the business climate for 2014 when the Albanian economy is forecast to grow by 2 percent, down from 0.4 percent in 2013 which was the lowest growth rate in more than a decade.
The AmCham Business Index dropped by 0.3 percent to 40.2 percent in 2013 but is expected to climb to 43 percent in 2014.
Around 50 percent of companies described the business climate in the general elections years of 2013 as unfavourable and rank informality as the top concern. Almost half of businesses say informality is widespread and that the internal political environment is unfavourable. Around 40 percent of surveyed businesses also described economic policies as unfavourable. The situation could be a result of the shift to progressive taxation which starting January 2014 has increased the corporate income tax to 15 percent, up from 10 percent and raised the personal income tax for high income earners.
Mark Crawford, the President of the AmCham in Albania said Albania should reduce its informality rate by increasing foreign direct investment and the velocity of money such as through micropayments.
U.S Ambassador to Albania Alexander Arvizu appealed for more transparency and clearer rules to improve the business climate. “Employment should increase through an increase in foreign investments including American investments based on the perception that Albania has become a better country to do business. This, as a result of greater transparency, clarity in contracts and more respect for existing contracts and if these steps are addressed you will see results,” said the ambassador.
Prime Minister Edi Rama stressed the need for investments in agriculture, tourism, mining and oil extraction as well as manufacturing considering that tradition sources of income such as remittances or tourism are already exhausted.
Economy Minister Arben Ahmetaj said the payment of around 200 million dollars in accumulated bills, the automatic VAT refunds and the establishment of a National Economic Council are some of the measures government has taken to improve the business climate in Albania.
Over the past few years, the American Chamber of Commerce in Albania has been continuously reiterating its unresolved issues over VAT reimbursement, tax re-audits, and frequent amendments of laws.
