Businesses: the on-line payment of taxes has failed

Tirana, June 20. Representatives of Albanian businesses met today with the director of the Directorate of Taxes and Excises, Arben Sefgjini. The business executives declared to Sefgjini that the program for paying taxes and excises on-line has failed. According to businesses, on-line payments are marred by continuous breakdowns and problems, rendering it useless. However, according to Sefgjini, “the taxpayers can pay on-line Value Added Tax (VAT), Income Tax (IT), the Social and Health Insurance Contributions, and the Employer’s Annual Tax Return”.
The main disagreement between the business and the tax authorities was about reference wages. Tax inspectors have limited ability to verify wages paid by the Albanian businesses. Thus, they add to tax returns filed by companies a fixed reference wage, which is decided by the Albanian government. In many cases, the ‘real’ wage paid to the Albanian workers by their employers is lower than the reference wage. This results in the tax authorities artificially increasing tax revenues, while workers and the businesses pay more than they should. The reference wage was approved by the Albanian government in 2006 in order to curb widespread tax evasion. The Albanian business associations have stated that tax inspectors are using the reference wages randomly and without restrictions.
Also, representatives of the Chamber of Clothing Manufacturers declared that their industry is paying a high price because of reference wages. Usually, wages in their industry are very low in order to compete with low-wage countries such as India, Bangladesh, and others. The clothing industry includes almost 400 Albanian companies employing from 50 to 400 hundred workers. The sales revenue for the entire industry is almost ALL 4 billion. Just in Tirana, there are 160 companies with a total sales revenue of ALL 1.2 billion. (Tirana Times Staff)