The new fiscal package entered into force on 1 January 2019, with around 91 percent of businesses operating in Albania set to benefit from a capital gain and profit tax rate cut ranging from zero to 5percent, whereas 98 percent of employees will benefit a reduced 5.5 percent income tax rate. Businesses with an annual turnover ranging from 8 to 14 million lek will benefit a reduced 5 percent profit tax down from a previous 15 percent profit rate. Prime Minister Edi Rama visited an entrepreneur who benefits from the significant tax rate cut under the government’s new fiscal package, who said that the latest tax inventive will help him to expand business and investment as well as enhance the company’s capital gains in the future.

“We are really satisfied with the profit tax significant reduction. My company had an annual turnover of around 100 million lek and we used to pay 15 million lek in profit tax. We will now pay 5 million lek in profit tax only. This measure will allow our company to invest more and hire more people. Thank you very much!” – the owner of a stone and marble processing workshop in Tirana said.

The Minister of Finance and Economy Arben Ahmetaj explained that a wide category of businesses and thousands of citizens who will benefit a lower income tax rate under the new fiscal package starting from January 1. “A major package of tax rate cuts came into force on January 1, with the small business operators with an annual turnover of around 14 14 million lek benefiting a one third reduced profit tax rate. Agribusiness and the whole agriculture sector and food processing industry will also benefit the significant tax cut as part of efforts to promote development of agriculture and support citizens by lowering the income tax rate. The package provides for a zero Value Added Tax rate on the agricultural inputs and reduced VAT rate on a series of other business activities. In 2018, Albania registered the highest growth rate in the region,” Finance Minister Ahmetaj said, adding that around 91 percent of the Albanian enterprises will now pay a reduced profit tax rate ranging from zero to 5 percent, whereas 98 percent of employees will pay a 5.5 percent income tax.

Prime Minister Edi Rama noted that the fiscal incentives to business will be translated into more jobs, as well as increased salaries in the country’s private sector.

“Indeed, this is the most delicate part in terms of employment. Starting today, every business with an annual turnover from 8 to 14 million lek will pay a profit tax rate three times lower compared to a 15 percent tax rate they had to pay to date. This move will provide much greater employment and self-employment opportunities. What’s most important in our view is that by offering a three-fold eased fiscal burden, we will provide businesses the opportunity to invest and expand more, as well as to increase employment and salaries,” PM Rama said, adding: “On the other hand we also need to reduce the number of people entering the university and instead increase the number of those who attend vocational education and two-year vocational colleges in order to become skilled specialists.”