Companies with 5 million leks turnover annually will now be taxed at higher rate. Government says move will significantly increase the number of businesses that are introduced to VAT, and bring more revenue to the state’s coffers.
By Tirana Times Staff
TIRANA, Nov. 16 – In what amounts to an indirect tax increase, Albania’s government has decided to change the definition of what a large business is for tax purposes, lowering the annual turnover threshold from 8 million leks to 5 million leks.
The government said in a statement that the move will significantly increase the number of businesses that are introduced to the Value Added Tax, and bring more revenue to the state budget, because VAT revenue carries a lot of weight in the state budget
Economy Minister Dritan Prifti said businesses that have an annual turnover of 5 million leks will now be classified as large businesses, seeking a middle ground between business demands and the government’s tax officials who had asked for an even lower threshold — 4 million leks.
The government said the change is justified by an investigative report by the Tax Directorate that a considerable part of businesses had an annual turnover higher than that stated. As a result of this investigation, around 3,500 businesses were discovered with turnover higher than 8 million leks, when they had reported a lower number.
According tax administration officials, their investigation reveals that the turnover numbers were not real for many small businesses that submitted their filings.
About 10 percent of small business taxpayers in Albania came up with an annual turnover of more than 2 million leks.
