One of Albania's strengths in attracting business and investment is its tax system, which offers significantly more favorable treatment than that of other countries in both the European Union and aspiring members of Europe.
Tax legislation is simpler, less cumbersome and with very competitive rates.
Prime Minister Edi Rama wants to add an important pillar to Albania's fiscal architecture. in the new draft Budget, Rama launches the “fiscal peace” project.
It is neither an Italian-style amnesty nor an attempt to lower taxes for the rich, Trump model.
Instead, it is a common-sense approach to make relations between the tax authorities and businesses more transparent, linear, and less confrontational with benefits for both state coffers and business budgets.
Fiscal peace involves direct agreements between the tax authorities and companies in which both revenue growth and profit tax are defined. Once this understanding is defined, there is no need for the IRS to conduct audits, opening complicated litigation with lengthy red tape.
The advantage is twofold.
The state knows at the outset how much it will collect from companies and can better define the various chapters of its Budget with the corresponding expenditures.
Companies know how much they have to pay and can manage their cash flows taking into account the fiscal commitments made with the government, thus having greater peace of mind in investment policies and certainty in setting multi-year development plans.
The details of this measure are not yet known0 but the impression is that it is an initiative that should find broad support.
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