Taxes and concessionary deals to be sent to the Constitutional Court

Let’s take it to the Constitutional Court… This seems to be the fate of many government bills or measures. Although sides have held debates on them, they cannot come to an agreement. So, the highest judicial body is the one that handles them and decides whether they should be applied or not. In fact, this is also expected to happen with the new government tax, which is part of the 2018 Tax Package: the introduction of small sized businesses in the Value Added Tax scheme. This was recently announced by MPs of the Democratic Party during the debates on the new taxes which will be applied next year at the parliamentary economy and finance committee. But, democrats were not happy even with the fact that the government decided to withdraw and not apply VAT for the entire category of small sized businesses, but only for those small businesses with an annual turnover of over 2 million lek.

Thus, 9 thousand small sized businesses will become part of the VAT scheme, while 70 thousand others will remain outside the scheme. But, if this is taken to the Constitutional Court, then that part of the tax package which concerns VAT for small sized businesses, will not be applied until the Constitutional Court decides on its legitimacy. The same thing is also happening with the fact that the ministry of Finance is unable to announce the winning company which will build the Central System for the Online Monitoring of Gambling Games, because a few months ago, the Constitutional Court received a complaint by the association of companies that operate in the gambling and betting industry, which is against outsourcing their monitoring. In other words, they have been against the government’s decision to impose an extra fee for the gambling and betting industry, in order to pay for the creation and the maintenance of the monitoring system. Let us not forget that two years ago, it was the Constitutional Court who prevented the application of the so called “super fines”, introduced with the new law “On tax procedures”.

Fuel marking, another concessionary deal sent to the Constitutional Court

The so called fuel marking concessionary agreement is among the many concessionary agreements sent to the Constitutional Court to be interpreted. Four years ago, it was the Association of Hydrocarbons the one asking the Constitutional Court to repeal this concessionary contract. But, this request was rejected by the Constitutional Court. The Court ruled that with this decision, the government had not violated the Constitution or any economic liberties, as it was claimed by the Association of Hydrocarbons. Among other things, the Constitutional Court also argued that “the concessionary agreement is an individual act and doesn’t fall under the jurisdiction of the Constitutional Court”.

Complaints over local taxes or the Criminal Code

There are many taxes which have ended up at the Constitutional Court in the recent years. One of the cases relates to the complained lodged by the Association for the Protection of Merchants against local government taxes. This association was against the incentive launched by the Municipality of Tirana, with the application of the temporary tax on education, which amounts 1800 lek a year for households, 4000 lek a year for small sized businesses, 27 thousand for medium sized businesses and 37 thousand for VIP businesses. This tax is against the constitutional principle which, according to the Association for the Protection of Merchants, guarantees free education in Albania. But, this claim was rejected by the Constitutional Court. Meanwhile, businesses have also addressed to the Constitutional Court about amendments taken place in the Criminal Code. These amendments related to the 14 new articles which stipulated up 10 years of prison sentence for breaches of the tax law. This issue was not the only one submitted by the Chamber of Commerce and Industry to the Constitutional Court.