Albanian small businesses are up in arms over proposals to change the tax system as they say more than 102,000 small businesses have closed over the last nine years.
Representatives from the Small and Medium Business Association said at a roundtable this week that businesses were suffering from a lack of government support and unfair fiscal policies.
“Businesses have closed as they are not supported by the government. Even in the pandemic, when businesses were closed, they paid cleaning fees [to the Municipality]. Businesses with 20 years of history are going bankrupt,” said Albert Nasto, the president of the organisation.
“Small businesses are being hurt by rising oil prices, fiscalisation costs, and taxes. Many of them are leaving the country,” he added.
Nikollaq Neranxi, president of the Association for the Protection of Entrepreneurship and Trade said corruption was rife between some businesses and the government.
“The business is being pushed out of the market by the state mafia, as it is impossible to compete with government-backed business. An instrument is also fiscalization. Soon, this law will be sent by us to the Constitutional Court. “We demand awareness, reaction and solution to the problem,” he said.
Currently, small businesses such as sole proprietors and the self-employed enjoy zero tax under a certain amount of income (10 million Lek/ EUR 83,500) and zero VAT.
But a new draft bill, allegedly seen by Euronews, means that this could be a thing of the past. Drafted in agreement with the International Monetary Fund, profit coming from business activities would be considered as personal income and taxed acccordingly.
Prime Minister Edi Rama responded to the reports, calling it “fake news” and saying that small businesses would not be taxed. He did not confirm that such clauses that point to such measures would be removed from the bill.
“The last article of the draft work clearly shows, however, that taxes on small business remain zero,” Rama said.
Democratic Party member Jorida Tabaku said that such measures could risk more than 100,000 small businesses shuttering for good.
“100,000 businesses that today are at the mercy of the government, which seems to be more concerned with the favors of some large businesses than the economic life of SMEs. “The government has prepared a medium-term tax plan where small businesses will be taxed”, she wrote on Facebook.
The Rama government changed the law to allow the removal of taxes in 2020, months before the 2021 general election. At the time, they noted they would be temporary, staying in place until 2029.
In June 2020, Rama said “We will make a change in the budget. We will remove all taxes from small business by 2029. For VAT we are still not 100% sure that it will be completely removed. The plan will be ready by June.”
Prime Minister Edi Rama: No Tax for Small Businesses by 2029
