Declaration of income to have minor impact on budget revenues

TIRANA, Nov. 15 – While 2012 will be the first time Albanians declare their annual earnings, the Albanian government does not expect any important impact on revenues during the first years of its implementation, says the Finance Ministry in its 2012 draft budget report. Considered as a tool for the further formalization of the Albanian economy, the law which entered into force earlier this year obliges everyone working or making a profit to declare their annual earnings by April 30 of each year. According to the Ministry of Finance, individual income statements will be made according to forms approved by the Ministry, and it comes at a time of fiscal amnesty, which targets a total formalization of the economy. The Official Gazette publishes various forms to be included in the declaration process, starting from the form of payment of individual income tax, individual annual statement of income for foreign individuals, and individual annual statement of income. “The first obligation of the declaration is April 30 for the fiscal year 2011,” reads the instruction of the Ministry of Finance. The declaration must be submitted to the Regional Tax Department. An income statement will have to come from all citizens and residents who are employed or have income from other sources. This does not exclude foreigners who have income in the territory of Albania. “The self-employed residents, domestic or foreign, who have income from the operation of small business, along with statement of business practice which they must submit by March 31 next year, should declare the profit after tax (benefit in the form of personal income) in the individual annual statement of income, just like other individuals, no later than April 30 of the year following the tax period for which the declaration is made,” stated the Ministry. The declaration may also be filed by persons who have no legal obligation to do so, but who want to benefit from deductible expenses.
Experts are skeptical as to whether or not the government initiative will be implemented considering the lack of capacities it has to handle around 1 million individuals who would complete the tax declarations. Xhavit Curri, a tax expert, tells reporters that by 2012 individuals will have to fill out their income and expenditure declarations for 2011, but very few people have been informed of this obligation and no awareness campaign has been launched. “Starting from this year, taxpayers will have to save their receipts, but no one has told them about this, not to mention the fact that the majority of points of sales still do not have a cash register and do not issue receipts.” According to financial experts, it will be difficult for Albanians to adjust to the system and for the government to implement the complicated deductible and refund system it has approved. Self-employed people with an annual turnover of up 2 million lek, and individuals with personal income of up to 200,000 lek will be excluded from the declaration form.