Government corrects tax for small businesses

The Ministry of Finances admits that the new scheme that was approved in January for this business category, has created a problematic situation by placing higher taxes on ambulatory salesmen and business with a smaller turnover than 2 million ALL, rather than imposing higher taxes on bigger businesses. The package of this January divided the small business in two categories for taxation purposes. For the small enterprises with a turnover less that 2 million ALL each year, was approved a fixed annual tax of 25,000 ALL. For the bigger businesses, with an annual turnover from 2 million to 8 million, the tax-profit norm was 7.5%.

This has made companies with an annual turnover from 2 to 8 million ALL pay a tax smaller than 25,000 ALL, paying even more than ambulatory salesmen.

To correct this anomaly, the government has brought a new law in Parliament, through which businesses with an annual turnover from 2 to 8 million ALL should not pay less than the ambulatory businesses, 25,000 ALL each year.

Besides this, the Ministry admits another problem in the relation, that of increasing the burden compared to one year ago for businesses that mount up to 2 million ALL.

“By the end of the year, these businesses paid 800 and 5000 ALL each year as tax. They claim that with the simplified tax with 25,000 |ALL each year, their tax burden increases and this is visible”, the Ministry admits in the relation.

The new draft has been prepared by experts of the Tax Directory. Sources from this institution say that their initial variant proposed the correcting of the fiscal burden for businesses with a lower turnover than 2 million and reduce it, but this has been rejected by the Ministry of Finances, since it could create problems in the market by leaving unchanged the existing variant of 25,000 ALL per year.

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