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IMF doesn’t approve Albanian government’s decisions to include small businesses in VAT

11/10/2017 00:00

The International Monetary Fund disagrees with the government’s decision to include small businesses in the VAT scheme.

Top Channel has learned that the IMF expressed reserves about this initiative, and has even presented arguments.

IMF thinks that VAT on small businesses might create administration problems, increasing costs for the Tax Office and not being able to bring the expected revenues for the state budget.

Including 70.000 small businesses in the VAT scheme means that the fiscal administration should process 100.000 additional tax declarations for at least once in three months.

The Tax inspectors will also have to inspect thousands of reimbursement requests from small businesses, which would make their work very difficult.

IMF’s skepticism has been expressed even before, since this is not the first time that Albania discusses such an initiative, and politicians have always faced opposition from the IMF. This is a stance that IMF doesn’t hold only in Albania, but in other economies as well.

Documents published by the Department of Fiscal Matters at the IMF recommend that the VAT threshold should never be zero, but to exclude smaller businesses with lower earnings.

Top Channel