TIRANA, July 18 – The ruling Socialist Party-led government has proposed a tax amnesty on businesses and property reassessment under modest rates, in two pre-electoral initiatives targeting to give a boost to sluggish business and consumer confidence ahead of the scheduled June 2017 elections.
Finance Minister Arben Ahmetaj says the amnesty will cancel business debts before 2011 and apply a partial pardon on debts accumulated in the past four years.
“The idea of this draft law is to clear all fines, late payment penalties and obligations before December 31, 2011. For obligations starting January 2012, whoever pays 70 percent of the final obligation will have 30 percent deducted although this has not yet been decided,” said Ahmetaj.
The finance minister says the bill is expected to pardon about 3 percent of the country’s GDP, equal to €300 million, which is almost half of the €800 million in debts owed by the business community.
In another initiative which has already been submitted to Parliament, the government is offering both households and businesses to reassess their property at modest tax rates of 2 to 3 percent, compared to a current 15 percent, in an amnesty which is back again after three years. The proposed amnesty is envisaged to be effective until late February 2017 and is expected to give a boost to the real estate market, which has been suffering poor demand and negatively affected by the increase of the corporate income, dividends, rents and capital gains by 5 percent to 15 percent since 2014.
Under the new changes, households can reassess an apartment they bought a decade ago for €30,000 and want to sell at €50,000 by making a €20,000 profit at only 2 percent of the difference and pay €400 compared to a current €3,000.
Meanwhile, businesses are offered the opportunity to reassess their real estate assets at a 3 percent rate, allowing them to present their assets in financial reports at market prices.
Back in 2011-2012, the previous Democratic Party-led government offered a similar partial amnesty on business debts and property reassessment ahead of the general elections.
While the amnesty served to thousands of citizens reassessing their property under minimum 1 percent fees, businesses mostly ignored the partial amnesty fearing verification of their self-declarations by tax inspectors.
