Changing taxes

In the past two months, while the elections are approaching, the government has intervened five times in the tax system. The changes started by removing VAT for appliances used for investments that cost more than 500.000 USD. In parallel, the government removed VAT for steal and cement that will be used for the construction of hydropower plants.

This is the first move that will be followed by others. Only a few days later, the VAT law was changed too and VAT was removed for agricultural machineries, despite the value. According to the Ministry of Finances, these measures will cost more than 10 billion ALL each year. After the VAT, the government deided to remove the income tax for salaries under 30.000 ALL.

According to the law, 200.000 employees will profit 2.5 billion ALL each year. The third tax that is being removed is VAT for agricultural machineries, which will have a 1.3 billion ALL effect in the budget. The last change is the halving of the tax for used cars.

This sudden decision, which doesn’t have a concrete draft, could cost to the budget almost 2 billion ALL. Only through these decisions the government has created a budget loss of 17 billion ALL each year. But the Prime Minister says that it will be even bigger, at least 200 million EUR, which puts into question the stability of the country’s finances.

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