The Albanian government is planning to apply a number of amnesties which are expected to have a total effect of 4.3 billion ALL on the state budget. So, referring to the figures issued by the ministry of Finance, the bill on the reevaluation of properties will generate at least 2 billion ALL for 2017. Meanwhile, the expected effects that the cancellation of penalties on condition that the actual tax debt is paid, are 2.3 billion ALL. This is a much smaller amount compared to the 91 billion ALL which accounts for the amount owed by businesses and individuals and which will be written off as part of the tax amnesty. This means that the state will lose a lot and will benefit very little from these financial concessions granted to citizens.
Tax amnesty, deadline for beneficiaries is extended
The new deadline for taxpayers to benefit from the tax amnesty will now be until the end of the year, as opposed to only a six month period which was the initial deadline
Taxes, penalties or unpaid contributions accumulated throughout the years? Now, everyone has a chance to take advantage of a process which writes off or facilitates their payment until 31 December 2017. This is the new deadline that the government has decided to apply in order to give more time to those who want to take advantage of the so called “tax amnesty”, which implies the government’s project for unpaid tax incurred up until 31 December 2010.
Initially, the government had planned for this project to last six months, but now, it has extended it up until the end of the year. Thus, it has offered another concession for all those who benefit in this great amnesty project. But what does the project of tax amnesty stipulate? Above all, all outstanding and unpaid tax debt belonging to the period before December 2010 will be written off. They will be written off for all individuals, physical and legal persons who fall under the category stipulated by this bill. The financial effect for this is 29.4 billion ALL. Meanwhile, the government has decided to write off all fines and late payment charges for outstanding tax debt for the period 2011-2014, if the taxpayer pays the actual tax. As far as social contributions are concerned, only interest and late payment charges will be written off, while the contribution itself must be paid. The project in question applies to unpaid taxes to both the central and local government and also to customs. On the other hand, through this amnesty, the government writes off all penalties incurred automatically for late declaration. Another category of beneficiaries includes the state sector of electrical energy and water supply system for the period 2011-2013. But this amnesty also applies to car owners. Those cars which have not been used and for which no tax has been paid until 2011, will be removed from circulation and unregistered and any outstanding charges on these vehicles will be written off. Also, transport vehicles which are not removed from circulation, unpaid tax until 2010 will be written off and fines and late payment charges for the period 2011-2014 will also be written off, upon the condition that taxes starting from 2011 are paid. “This amnesty doesn’t benefit companies that have been given a sentence by a court for tax evasion or smuggling”, the bill states.
Argument: Austere measures didn’t yield any results, this is why we wrote off taxes
“This incentive aims at writing off obligations which can no longer be collected and for which, austere measures have yielded no result”. This is the argument given by the government in relation to the drafting of such tax amnesty bill, adding that this incentive is being taken at a time when all measures to collect these taxes have been exhausted and to enable the tax administration to collect recently incurred taxes. According to the government, this incentive has been long discussed with the main financial institutions, mainly with the International Monetary Fund. “Of course, we have been consulted with the best international practices in order to find a balance between facilitation and writing off debts”, experts of the ministry of Finance said.
Times of amnesties, several of them within a short period of time
Amnesties applying to the energy sector, social contributions, fines, motor vehicle taxes, reevaluation of properties and the last project is the one granting an amnesty for farmers
These may be easily considered as “times of amnesties”. While some have already started to be applied and some others are under way, they offer numerous financial benefits for taxpayers. We may recall the amnesty for the reevaluation of properties, which entered in force on 1 September 2016 and expires on 31 May of this year, thanks to a further extension of the end date. This amnesty offers the possibility of reevaluating properties with the market value, by only paying 2% worth of tax as opposed to 15% for individuals and 3% for businesses, at the moment when the reevaluation is made. Then, there is the amnesty in the energy sector, in which 126 thousand subscribers benefit a reduction of the late payment charges. This process has started on 19 December last year and will last until June 2017. It applies to all of those who outstanding debts with the state owned power supply company, OSHEE. Meanwhile, a while ago, the minister of Agriculture declared that he would propose to the government an amnesty for farmers who are in debt with the Agency for Agricultural and Rural Development.
