2024 Government Initiative: Streamlining Tariffs and Tax Policies

The Albanian government plans to phase out reduced tariffs and tax exemptions over the next two years. In an official document addressing the alignment of Albanian legislation with European Union directives, the government acknowledges the ongoing challenge of harmonization. The document outlines priorities and plans until 2030, emphasizing the need to streamline tax criteria in alignment with EU standards.

The Ministry of Finance and Economy is set to enact changes in 2024, eliminating reduced tariffs and exemptions in direct taxes. Subsequently, in 2025 and beyond, a review of current exemptions in value-added tax is planned to eliminate those that have fulfilled their mission or proven unsuccessful in practice.

International institutions have criticized direct tax and value-added tax exemptions, considering them hindrances to revenue collection and potential avenues for evasion. Over the years, fiscal packages have included various exemptions, particularly in value-added tax and direct taxes. Notably, exemptions for investors in energy and special status investors in tourism have drawn scrutiny. The latter has been criticized for potentially enabling tax avoidance in non-tourism-related construction projects. The landscape of exemptions has been extensive and multifaceted, affecting various sectors.