New fiscal package

27/11/2013 00:00

The Ministry of Finances has prepared the preliminary draft for the
fiscal package, which is expected to bring strong exchanges in the tax
system that citizens and business are paying. Top Channel has learned
that the initial variant affects 15 types of taxes that include direct
business and individual taxes, and also indirect taxes through
consumption.

The first change is that on the income tax, which brings back the progressive principle on wages and other resources. The government protects wages until 30.000 ALL, and then it is progressively increased.

The Ministry of Finances has not published the way how tax will change, since the package should receive an International Monetary Fund approval first.

Preliminary calculations show that the progressive tax implementation will reduce the budget revenues with 8 billion ALL, but this will be compensated by increasing other taxes. Progressive tax will be applied not only for personal revenues, but also for business profits. The government has decided that businesses with more than 8 million ALL of turnover should pay twice more than those who don’t cross this limit.

Although it is not official yet, income tax in the next January will be 7.5 or 8% for under 8 million ALL of turnover, and 15 or 16% for those over this limit. This is only for direct taxes. The new package changes the indirect taxes too, which are paid by citizens in the final price. There will be an increase with the tobacco excise, coffee and even fuel, which was one of the most discussed issue in the planning of this package.

The tax increase levels are not public yet. Besides excise, another option is reviewing VAT with 1% on common goods, although for some of the basic consumption goods this tax will almost be halved. The entire package will be announced only after it will be approved by the International Monetary Fund, which will have a more than suggesting role in the financial and economic policies of the Albanian government.

Top Channel