Cut in VAT threshold to put new 90,000 businesses in new scheme

TIRANA, August 1 – Government’s intention of further lowering the value added tax (VAT) threshold for businesses to 3 million lek of turnover a year would put some 90,000 small businesses in the new scheme, experts say.
Currently, around 25,000 businesses with an annual turnover of 5 million lek pay VAT.
Last June, Finance Minister Ridvan Bode said government was thinking about a new bill that could lower the threshold for businesses paying value added tax (VAT) to 3 million lek (30,000 dollars) of annual turnover, from 5 million lek currently.
Last January, government lowered the VAT threshold to 5 million lek, down from 8 million lek, in an effort to collect more taxes and avoid informality. The move put some 17,000 small businesses in the VAT scheme.
The next decrease of the VAT threshold, which government has not announced yet when it will become effective, is expected to put the majority of small businesses in the VAT scheme.