Tax laws

Albanian government announces new changes to tax laws – Taxation


Albania: Albanian government announces new changes to tax laws

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The Albanian Minister of Finance presented the 2022 budget package to the Parliamentary Assembly of Economy and Finance.

The main laws that will be affected by the changes included in the 2022 tax package are on income tax; value added tax in the Republic of Albania; excise duties in the Republic of Albania and national taxes.

The main proposed changes that directly affect citizens are increasing the taxable minimum wage to the level of ALL 40,000 per month, as well as reducing the tax rate by 50% for taxpayers with salary incomes of ALL 40,001 to 50,000 ALL per month.

Part of society will also be supported by the revision of the upper progressive tax bracket. The 23% tax standard is to be applied to salaries above ALL 200,000 per month in 2022.

The change that affects the VAT law is the treatment with a reduced VAT rate of 10% of the supply of agricultural inputs (except agricultural genetic modifiers). However, the list of categories of agricultural inputs will be determined later. This measure should help reduce informality, strengthen the economy and guarantee agricultural products.

Following changes affecting national production, a levy of 100 lek / kg for the import or production of powdered milk is foreseen. A proposal specifically intended to incentivize the production and trade of milk in the country aimed at supporting local farmers.

In addition, a new schedule for increasing the level of excise duties on tobacco and its derivatives for the period 2022-2025 is being drawn up. The bill also envisages the application of automatic indexation with the inflation rate of specific excise duties and the unification of excise duties for petroleum gases and other gaseous hydrocarbons for all destinations of its use at the level of 6 ALL per liter. Currently, the excise level for this by-product is ALL 8 per liter. if used as fuel for vehicles, and 0 ALL per lt. if it is used by other consumers for any purpose. The unification of the excise tax on petroleum gases and other gaseous hydrocarbons is expected to significantly increase the amount of excise collection per year.

Overall, the main objectives of this package for 2022 are the establishment of economic stability, the consolidation of public finances and the gradual reduction of the budget deficit and public debt, the correction of inefficient tax and tariff exemptions, as well as increased revenue. in the state budget to the tune of 5.2 billion leks.

Further announcements will concretely announce how these changes will be implemented.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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