Albania Critical of World Bank Report

Tirana | 11 September 2009 | Gergj Erebara
Albania’s government criticized certain findings of a World Bank report on Thursday, claiming that the tax weight on profits indicator is “worthless” and “not comparable” between different countries.

Speaking to local broadcaster Top-Channel TV, Deputy Finance Minister Florion Mima said that the methodology used by the World Bank was flawed and not applicable to Albania.

“The methodology used by the World Bank is not so indicative, because, according to our estimates, businesses in Albania pay, on average, only 12 per cent of their profits as tax, and this is the lowest rate in the world,” Mima said.

The World Bank report found that businesses in Albania pay as much as 45 per cent of their earnings in tax, compared to 16.4 per cent in Macedonia, 27 per cent in Bosnia and Herzegovina, 29 per cent in Kosovo, 31 in Bulgaria, and 34 per cent in Serbia.

The Albanian government claims that it has the lowest business tax rates in the world. In the last four years, Albania halved its corporate profits tax and lowered social insurance contributions paid by employers. Lower tax revenues from businesses were compensated for in the state budget through increased excise duties and consumer taxation.

However, the World Bank report is based on the actual tax paid by a sample company in a given country and not on the tax level imposed under law.

The “tax level imposed by the law is one thing, while another important factor [...] in Albania is the extensive use of referral barriers by the tax administration, which make the real taxes paid by the companies higher then their legal obligations,” the head of the Construction Association of Albania, Ilir Hebovia, told Top-Channel.  Source: Balkaninsight

Short URL: http://www.albanianeconomy.com/news/?p=2074

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