TIRANA, March 3 – Government has blamed the new online tax declaration system operational since January 2014 for the poor performance in the tax collection in the first month of this year.
Finance Ministry data shows government revenue in January 2014 dropped by 4.6 percent to 26.5 billion lek (Euro 185.6 million) compared to a year ago, but was up by 4.2 percent compared to the target it had set for last January.
Commenting on the performance of the profit tax which dropped by 61 percent to only 393 million lek (Euro 2.7 million) in January 2015 and was down by 73.6 percent compared to the target, the Finance Ministry says the situation is not a result of a decline in the business activity but is related to the generation of the tax declarations by the new online system the General Tax Directorate has made operational.
Since January 2014, the corporate income tax has been raised to 15 percent, up from 10 percent previously when Albania applied a 10 percent flat tax regime on corporate and personal income taxes.
The ministry says the new online system, whose consequences were only felt last January, will improve relations with businesses and improve business climate.
The value added tax, which is levied at a fixed 20 percent on almost every product and service and accounts for around one-third of total government revenue rose by 4.5 percent to 9.9 billion lek (Euro 69.3 million) year-on-year in January 2015.
Government paid only 231 million lek (Euro 1.6 million) in accumulated unpaid bills to the business community in January 2015, down 77 percent compared to the target it had set.
Public investments also failed to meet targets by around 26 percent, resulting in a budget surplus of around 3.6 billion lek for the first month of the year.
In a bid to bring the economy back to sustainable growth, the Socialist Party-led left wing majority has approved a rather overoptimistic budget for 2015 expecting a 3 percent growth and a slight reduction of public debt already hovering at 72 percent of the GDP.
Albanians will pay an extra 16 billion lek (around 112 million Euros) in higher taxes on non-wage income, fuel and tobacco in 2015, according to the 2015 fiscal package government has just announced.
While key taxes such as the personal and corporate income taxes will remain unchanged, defying businesses calls for a return to the flat tax regime after the corporate income tax was raised by 5 percent to 15 percent in 2014, the fiscal burden will further increase by raising the withholding tax on dividends and rents, increasing the circulation tax on fuel and imposing higher excise rates on tobacco.
