New budget and fiscal package 2015 entered in force in January 1, 2015

Starting from January 1^st, financial institutions and other institutions related to them started the implementation of the new Budget and fiscal package for 2015, adopted on December 2014 by parliament.

Speaking about Budget 2015, the government has decided as objectives the maintenance of macro-economic balances, the decrease of public debt and to guarantee the implementation of undertaken reforms. The total amount of the yearly budget is predicted to be 414.4 billion ALL, about 27.8% of the GDP, with an increase of 49.7 bl ALL in nominal terms, comparing it to Budget 2014.  Other objectives about the economic performance of Albania during 2015 are the stable economic growth up to 3% and the increase of foreign investments. The total amount of public expenses for 2015 will reach 475 bl ALL, according to Budget 2015, about 31% of the GDP. As for the budgetary deficit, it will decrease to 4% of the GDP from 6.6% that it had been planned on Budget 2014.

The government aims to reach an economic growth by fighting the fiscal evasion and not by increasing taxes. The government has reflected this point of view when compiling the new fiscal package for this year, which entered into force in January 1, 2015. The new fiscal package provides the reduction or the decrease of 15 taxes which, according to experts, will affect in boosting production, exports and ease the activity of businesses and farmers.

Income tax:

Starting from January 1, the income tax increased to 15% from 10% that it was in 2014. This means that dividends, loan interests, bank deposits or similar contracts, incomes from copyright or intellectual property, incomes from gambler and all other incomes will be taxed with 15%.

Gross written Premiums for non-life products will be excluded from VAT with the aim to be treated in accordance to the European directive, but the government has put a new 3% national tax for them. The effect of this tax on state revenues is predicted to be circa 220 ml ALL for 2015. The net effect from these changes will be negative, with about 280 ml ALL loss, but economy experts say this move will boost the insurance market activity and hopefully increase its standards.

Circulation tax is another tax that has changed starting from January 1^st, by increasing to 27 ALL per liter, from 17 ALL/liter that it was in 2014.

News source/photo credits: ATA