BoA suspends loan repayments for individuals and businesses

TIRANA, March 12 – Amid the growing threat of the COVID-19 impact on the economy, the Bank of Albania announced that customers will be allowed to defer credit payments for up to three months.The decision will be valid for individuals as well as private entities.
However, this does not mean that loans will be forgiven. The decision was taken in accordance with measures taken to prevent the spread of coronavirus by avoiding queues in the banks as well as to reduce the negative impact that the coronavirus will have on the economy.
After bars, restaurants and cafes were officially closed on Wednesday to contain the spread of COVID-19, the business and tourism sectors in Albania requested relief packages to reduce the impact of the outbreak. The president of the Albanian Association for the Protection of Traders and Markets called on the government and local government to help business so that that the pandemic does not have severe repercussions on the economy.
“In the difficult days we are going through, as both citizens and entrepreneurs, quick decision making and solidarity are a must. Taking into account other countries’ experience of coping with the coronavirus epidemic, the Albanian Association for the Protection of Traders and Marketers urges central and local governments to take economic measures,” the president recently said.
In order to alleviate harmful impacts to the business sector, the Association suggested that an economic relief package is offered by the government, containing the following four points: Relief of tax burdens, removing late payment fees for water and electricity bills as well as VAT and tax profits and the opportunity to negotiate with banks for the suspension of loan repayments.
Tourism sector associations in the country have come together for a relief package as well, as the sector is experiencing its second hit shortly after last year’s earthquake. In an official letter addressed to the Ministry of Environment and Tourism, associations emphasized that the cancellation of charter flights will affect tourism negatively.
“These cancellations will have a huge impact, especially on catering, as many of the hotels under contracts have received up to 50 percent of down payments which they have to repay. This will lead to their bankruptcy due to the lack of liquidity, ” the associations stated.
In the relief package, businesses have requested social and health insurance subsidies and a number of other aspects summarized in 12 points.
“In order to help businesses cope with the difficult financial situation of associations, through an official letter addressed to the government we ask for social security payment subsidies for a period of 3-6 months, the suspension the payment of tax profits for a minimum of 3 months, 50 percent subsidies to employees, the granting subsidies for residual wages, Suspension of payments for water, electricity for a period of 6 months, depreciation of property tax for 2020, the extension of the payment deadline for local taxes, the right to not pay for the ‘2020 Copyright’, the abolishing of the airport tax, the revision of 2019 Balance Sheet Statements at the end of April and reduction of airport taxes on charter flights by the TIA concessionaire for 2020,” the tourism associations stated.
In this line, accountants requested the extension of deadlines for filing out VAT, Tax Profit and Business balance sheets, as they are required to manually collect the required documentation. However tax officials said that extending deadlines also requires changes to the legislation.
Businesses are required to make VAT payment through banks on the 14th of March, while accountants need to collect documentation manually to complete the balance sheets. March 31st is approaching, when 2019 balance sheets are due to be submitted online to the tax authorities and as such, March is usually the busiest month for accountants who need to be in physical contact with businesses in order to gather the proper documentation to fill out the balance sheets.