The production factory of metal profiles “PAPMETAL” in Xhafzotaj, a leading company in this field in the Albanian market, has doubled production in the last two years, thanks also to the fiscal incentives of the government to boost domestic production and to fight informality.

Prime Minister Edi Rama, accompanied by the Director General of Taxation, visited today this factory to look closely at the effects that the mitigating measures of the government have had on this business.

Established in 1993, this company has succeeded in the last two years in building a new factory, and starting work for another facility with greater capacity. Factory managers aim at doubling the volume of production from 25 tons to 50 tons, thus meeting every requirement of the domestic market. The manager of the factory says that it was easier to reach the target thanks to the creation of new spaces and fiscal facilities provided by the government fiscal facilities. He mentioned in particular the immediate VAT reimbursement and abolition on the import of machinery and equipment for manufacturing. He explains that 20 thousand Euros were saved thanks to the 1 million euro investment in productive infrastructure, and this money was reinvested in manufacturing.

“Our company has grown significantly in 2014 and in 2015, both in terms of quantity and figures. Since we have decrease the price of raw materials, sales have now raised. The company has been growing every year, and has taken these major steps in the past two years. The biggest relief we have had in the last two years is VAT reimbursement. I have many clients, companies that work also for IKEA, and the biggest problem has been VAT refund. We were forced to take raw material with the customs regime, when we produce”, the administrator said, in addition to underlining that another big relief has been VAT abolition for import machineries and equipment. “Out of this 1 million euro investment in VAT, we have saved 200 thousand euros in the customs.”

He says he is satisfied also with the operation against informality. His company has felt the impact of this operation, because none of his customers would now purchase without a receipt, and it helps in the VAT reimbursement.

“The fight against informality has been a great relief for us. All small companies that had problems before, now have licenses and require the receipt. All welders are licensed”- the administrator said, and added that now it is easier to obtain a licence, after submitting the project and the investment plan.

The first effect of the abolition of tax on small business and crafts was the formalization of their activity, and this will have a domino effect also for large business. “The fact that tax was zeroed for small business and especially for artisans who are part of the small business, will have a strong effect during this year”, the Prime Minister said. “Now, they have no longer the problem of declaring income because of the fear to exceeding the limit and then enter large business. Their concern now is how to be okay with the bills, because it is clear that following the tax abolition penalties are increased, if you continue evading and are not okay with the bills. So this will relieve all of you.”

In addition, a positive effect on an increased demand for their products, according to managers of the company, has had the issuance of TIN to farmers who have grown this year the demand for metal profiles for the construction of greenhouses, especially in the areas of Lushnje, Mallakastër and Vlore. “They didn’t have TIN, and we would not supply them. Now we understand and importance that a TIN has for farmer. And we understand it here, because we see it directly. Before they would send others, while now they come in person for they have their own TIN”, the administrator said.

The initial reluctance to be provided with TIN, the Prime Minister said, was due to fraud at the expense of farmers. “They were told they if they obtained the TIN, they would pay taxes. TIN means formalization, and who has it becomes a VAT beneficiary. If you have the TIN, you get 20% back. It doesn’t mean that you don’t pay taxes, but you pay 20% less.”

Prime Minister inquired about the behaviour of the tax administration to business. “Everything has been regular. We work a lot through the system. They have been here 2 or 3 times this year”, the manager of the company commented.

“PAPMETAL” is the winner of “Golden Bee” as a successful venture.