Businesses increasingly unhappy with the tax authorities

Tirana, May 19, 2008. Businesses and their respective business associations are complaining about the way the tax authorities are calculating the revenue tax for small businesses. In many case the revenue tax that these businesses should prepay during the first four months of 2008 is higher than that hey paid in 2007. The majority of the small businesses had counted to pay less than in 2007 because the revenue tax was cut in half, from 20 percent to just 10 percent. However, this is not the case. For example, a drug store that paid last year ALL 25,000 per month should prepay now around ALL 28,000 per month. The answer of the tax authorities is that the businesses that are paying more than they should are going to be reimbursed by the end of the year.
According to the Albania tax regulations, the businesses prepay their revenue tax according to the income they realised two years ago. Therefore, they are taxed now according to the revenue realised in 2006. For the remaining 8 months, the businesses are taxed according to the revenue they realised during the previous financial year (in this case year 2007). If the businesses pay more than they should, they are reimbursed in the end of the year. However, the reimbursement procedures take usually a long time preventing the owners from investing their profits to expand their businesses.
At the same time, the tax authorities are declaring that they have collected more as revenue tax than planned in the beginning of 2008. It was planned that the tax authorities were going to collect ALL 3.7 billion for the first quarter of 2008, or 30 percent less than during the same period of 2007. However, the tax authorities declared that they have collected ALL 6 billion, 13 percent more than during the first quarter of 2007 and 60 percent more than planned for first quarter of 2008. The businesses complain that the surplus collected by the tax authorities is due to their unfair tax procedures. The tax authorities argue that the abovementioned figures are the result of their perseverance and the increased number of businesses that pay their taxes. (Tirana Times Staff)