The draft law had already been passed in the Business Consultative Council and was ready to be sent to government for approval
TIRANA, May 9 – Following strong opposition by interest groups and experts, government seems to have withdrawn from its intention to apply a progressive profit tax rate for big companies. Finance Ministry sources quoted by local media this week said a working group will be established to further discuss and review the draft law which abolishes the 10 percent flat tax and imposes a new progressive profit tax of up to 30 percent for corporations. The draft law had already been passed in the Business Consultative Council and was ready to be sent to government for approval.
Government says it is drafting a new law that will raise profit taxes for big companies up to 30 percent, changing the 10 percent flat tax system it has applied since 2008 into a progressive profit tax. Finance Ministry sources say the 10 percent profit tax will remain in force only for companies with a profit rate of up to 20 percent. The profit tax for companies with profit rates from 20 to 30 percent will increase to 20 percent, while companies with a profit rate of more than 30 percent will be taxed at 30 percent.
A study by the Finance Ministry shows that 15 companies out of 100 big companies operating in Albania apply profit rates of more than 20 percent. Data show 6 of the surveyed companies had profit rates from 20 to 30 percent while 9 others applied profit rates of more than 30 percent.
The Tirana Chamber of Commerce and Industry says the new measure would ruin the plans of big investors, especially foreign ones.
Experts have described the measure to increase taxes at this moment when businesses are still recovering from the crisis as a wrong decision making Albania less attractive for potential investors.
The law mostly affects banks and telecommunication companies which Prime Minister Berisha had previously said often charge unjustifiably high tariffs.
