TIRANA, June 6 – Taxes and relations with tax authorities were one of the key concerns for the business community in 2015, according to a survey by the American Chamber of Commerce in Albania. More than two-thirds of AmCham members, some 70 percent, described the overall tax level in Albania very unfavorable or unfavorable, a sharp deterioration compared to 2013, just before Albania lifted its 10 percent flat tax regime and adopted a 15 percent tax on corporate income, dividends, rents and capital gains.
Relations with tax authorities also sharply deteriorated in 2015 when the government launched an aggressive nationwide campaign to tackle informality and penalties on businesses sharply increased. One out of three respondents described relations with tax inspectors as very bad or bad, showed the survey.
“It seems that the government does not understand the situation and climate under which businesses operate. It must find mechanisms and impart positive energy on businesses. The fiscal package and laws must be in accordance with the climate, culture, and mentality under which businesses operate,” said a respondent.
“Reduce the profit tax rate so that this may lead to an increase in the level of foreign investment in our country, as well as attract further foreign investment. This, in turn, would lead to a higher level of employment and would make Albania more competitive in the region,” added another local respondent.
Despite positive expectations about the overall business climate, 2016 prospects about higher investment and employment remain grim with only about a quarter of surveyed businesses expecting improvement.
The latest AmCham Business Index showed Albania’s business climate hit a four-year low in 2015 despite government efforts to tackle massive tax evasion and reform the energy sector. High taxes, unfair competition, government bureaucracy, the tough business climate and the informal economy were listed as the top five concerns for foreign and Albanian businesses represented by the AmCham.
