TIRANA, March 2 – A traders association has sued the Municipality of Tirana over a sharp increase in local taxes and tariffs after several days of protests and failed negotiations with Tirana Mayor Erion Veliaj, claiming the new tax hikes will take them to bankruptcy.
The new legal battle by the Association for the Protection of Traders and the Market comes after the association is already challenging the government at the Constitutional Court over two laws approved in late 2015 sharply increasing penalties on tax evasion and making informality punishable by prison.
Small business owners have been staging protests in the past few days demanding a review of the tax on occupation of public space, buildings, advertising, education infrastructure and cleaning which have increased by 2 to 10-fold starting this year.
“Today every small, medium-sized and big business who doesn’t even occupy public space is bankrupt because the other scandalously increased taxes are unaffordable,” said Nikollaq Neranxi, the head of the Association, announcing that traders have filed a complaint with the Tirana Administrative Court demanding the cancellation of the new taxes.
“The situation is critical, the taxes have either been imposed because of lack of knowledge as nobody provides explanations on what basis and study they were raised or there is a strategy to lead existing businesses to bankruptcy and create a new class of businessmen with dirty money,” he added.
The association says negotiations with Tirana Mayor Erion Veliaj failed to provide results.
In a meeting with representatives of protesting traders last weekend, Veliaj offered to review bills for the first two months of this year on the new public space occupation tax which traders claim they didn’t know about, but did not offer any major concession to their demands.
“Traders must pay if they sell in public spaces because the public space belongs to everybody. I defend citizens’ interests and not minor interests,” Veliaj said.
Protesters say they are facing a 10-fold increase in the local tax on occupation of public space which they claim the Tirana municipal council secretly approved on Dec. 30 and that they have been acquainted with the new tax only recently with the new tax bills.
The tax on occupation of public space, mostly affecting bars and restaurants which have improvised outdoor facilities, has increased from 150 lek (€1.07)/m2 a month to 1,500 lek (€10.7)/m2 a month for downtown Tirana businesses starting this year.
Protesting traders have been showing staggering bills of up to €1,000 a month on occupation of public spaces in a 10-fold increase.
Small business owners say such a drastic increase has been non-transparent and not based on logic or any economic study, warning it could lead to mass closure and leave thousands of workers jobless.
The new taxes approved by the country’s biggest municipality in late December came after the Albanian government made a major concession in late 2015 in the midst of nationwide campaign against informality, offering tax cuts to small and medium-sized enterprises, many of which will no longer have to pay any profit tax.
Deal on track
Later on Wednesday evening, other business representatives said they had reached a deal with the Tirana mayor to revise tariffs on occupation of public space and lift the tariff of 2,500 lek (€18) per table placed in public facilities. The newly proposed tariffs on occupation of public space range from 400 lek (€2.8) to 1,500 lek (€18).
The municipality is also reported to have agreed to cancel the public space tax bills for the first two months of this year.
