Government withdraws progressive tax

The Ministry of Economy notified yesterday the Business Consultative Council of withdrawing the draft, an action that was welcomed by the business, since it increased taxes for businesses with high profit percentages. Finance Ministry sources said for Top-Channel that the draft will be reformulated, however, it is not clear yet if the new law will contain the progressive taxation principle.

The draft offered by the Ministry of Finances returned progressive taxation in Albania, a tax that the government abandoned four years ago to replace with the flat tax at a level of 10%.

The withdrawn law doubled tax on profit for businesses with higher profits levels that 20% of annual turnover, and trippled the tax for businesses with higher profits than 30% of the turnover. Business representatives say that this law would affect at least 1000 companies in the country, in all economy sectors, especially in construction and other areas.

The draft was commented by the experts as a withdrawal of the government from the flat tax, which has been considered by the Albanian Prime Minister as one of most successful reforms of his government and that turned Albania into a country with the lowest taxation level in Europe.

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