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The Albanian Minister of Finance presented the Fiscal Package of 2022 during the Parliamentary Assembly on Economy and Finance. 

The main laws that will be affected by the changes included in the fiscal package of 2022 are on income tax; value added tax in the Republic of Albania; excises in the Republic of Albania and national taxes. 

The main proposed changes that affect directly the citizens are the increase of the minimum taxable wage to the level of 40,000 ALL per month, as well as the reduction by 50% of the tax rate for taxpayers with salary income from 40,001 ALL to 50,000 ALL per month. 

A part of the society will also be supported by reviewing the upper band of progressive taxation. The 23% taxation norm is to be applied to salaries over 200,000 ALL per month in 2022. 

The change that affects the VAT Law is the treatment with reduced VAT rate of 10% of the supply of agricultural inputs (except for agricultural genetic modifiers). However, the list of categories of agricultural inputs will be determined later in time. This measure is expected to contribute to reducing informality, strengthening the economy, and ensuring the guarantee of agricultural products. 

Following the changes that affect domestic production, a tax imposition of 100 lek/kg for the import or production of powdered milk is foreseen. A proposal specifically intended to incentivize milk production and trade within the country aiming to support local farmers. 

What is more, a new schedule for increasing the level of excise duty on tobacco and its by-products for the period 2022-2025 is being prepared. The draft law also considers the application of an Automatic Indexation with the inflation rate of specific excise tariffs and Unification of excise for petroleum gases and other gas hydrocarbons for all destinations of its use at the level of 6 ALL per lt. Currently the excise level for this by-product is 8 ALL per lt. if it is used as fuel for vehicles, and 0 ALL per lt. if it is used by other consumers for any purpose. The unification of the excise tax for oil gases and other gas hydrocarbons is expected to significantly increase the excise collection amount per year. 

Overall, the main goals of this package for 2022 are the creation of economic stability, the consolidation of public finances and the gradual reduction of the budget deficit and public debt, the correction of ineffective tax exemptions and tariffs, as well as the increase of revenues in the state budget to the extent of 5.2 billion lek. 

Further announcements will concretely announce how these changes will be implemented. 

For additional information, please contact our Country Executive, Ms. Drilona Likaj, at our Eurofast office in Albania at drilona.likaj@eurofast.eu

Eurofast is a regional business advisory organization employing local advisors in over 23 cities in South East Europe & the Middle East (SEEME). The Organisation is uniquely positioned as a one-stop-shop for investors and companies looking for professional services in Tax & Transfer Pricing – Payroll & Employment – Accounting & Audit –Advisory & Corporate. 

Drilona Likaj
Country Executive
Eurofast Tirana
tirana@eurofast.eu