Businesses worried over high informality rate

TIRANA, Feb. 16 – The business community has expressed its concern over the tax register process and the high informality rates even after the government decision to make the installation of cash registers compulsory for all small businesses starting from this year. The concerns were raised in a forum held this week with members of the American Chamber of Commerce. The problematic situation was admitted even by Tax Director General Gazmir Spahija who confirmed only 40,000 small businesses or 50 percent of them had installed cash registers.
The garment and footwear industry, which is the country’s main exporter, also called on government to keep monthly minimum wage for this industry unchanged in order not to increase their tax burden. Currently, the minimum monthly wage is at 19,000 lek (190 USD).
Another concern raised by participating businesses was failure to reimburse the value added tax in time by the tax administration. However, tax authorities said they owed only 2.8 billion lek to businesses and had reimbursed in 8.2 billion lek in 2010, up from only 3.2 billion lek in 2009.
Car distributor representatives also complained about the tax evasion with imported cars. Licensed car distributors warned that 25,000 cars which had not been cleared through customs in 2010 had entered Albania in 2010. Tax director Gazmir Spahija also pledged his administration would undertake strict inspections on the VAT implementation following the removal of thresholds even for private legal, medical and accounting services starting from last February, making them all subject to VAT.
According to a recent government decision, only small business owners who have bought compulsory cash registers from authorized companies until February 28, 2011 will benefit reimbursement in local government taxes.
However, the implementation of this law remains to be seen as only few businesses, even in downtown Tirana, currently give their customers cash register receipts.
Currently, the VAT inclusion for small businesses is 5 million lek of annual turnover.