The parliament voted and approved on Monday the new fiscal package that will increase the income tax limit for small and medium enterprises (SME) from Lek 8 million to Lek 14 million. The decision is expected to come to force by January 2019, Minister of Economy and Finance Arben Ahmetaj said during his speech in Parliament.
Currently, the tax limit for moving from 5% to 15% of value-added tax (VAT) for small businesses in Albania is Lek 8 million, meaning businesses which declare more than Lek 8 million of revenue has to pay 15% of VAT.
According to the Ahmetaj, about 91% of entrepreneurship in the country has been eased by the fiscal burden. During his speech, Ahmetaj stressed that with the new fiscal package, the government will significantly reduced taxes and continue to give priority to the development of agro-tourism. While, responding to opposition accusations, Ahmetaj stressed that there is no price increase.
Around 10,800 businesses will benefit from the decision and will pay 5% income tax, Ahmetaj said, adding that over 93,000 businesses in total have benefited from direct tax cuts.
Meanwhile, many small businesses entered the VAT scheme on April 1 after tax exemption limit was reduced to Lek 2 million from Lek 5 million.
The opposition and small business representatives sought the annulment of the government's decision to include small businesses in the VAT scheme.
The increase of taxes and the inclusion of small businesses in the VAT scheme have been criticized also by the International Monetary Fund (IMF) and the American Chamber of Commerce.
While, Minister of Tourism Blendi Klosi emphasized that this package will boost the development of agro-tourism and make this sector competitive.