Besimi: Predictability in the field of tax policy and raising the VAT registration to EUR 3 million, as support for small- and medium-sized enterprises

Predictability in the field of tax policy - retaining the 10% profit tax in the next 4-year period, tax benefits for export-oriented companies under the new Law on Value Added Tax, preferential rates of 5% for agricultural producers and craftsmen, as well as raising the VAT registration threshold to Denar 3 million as of 2022. This was announced by Minister of Finance Besimi in terms of tax policy throughout his 4-year term of office as Minister of Finance, for the purpose of providing support to the business sector. In addition, Besimi also announced the reduction of parafiscal charges up to 75%.

- Predictability in the field of tax policy will be guaranteed, whereby profit tax will remain at 10% throughout the entire period until 2024. The focus will be placed on reconfiguring the Valued Added tax through a series of measures, starting with the enactment of a new Law on Value Added Tax stipulating tax benefits for export-oriented companies, 10% VAT for all restaurant services for which intensive activities have already been undertaken, revision of the VAT rates on raw materials for domestic producers and reduction of the VAT rate for agricultural producers and reduction of VAT on raw materials for export-oriented companies, reduction of VAT on craftsman services from 18% to 5%. What is also planned is raising the VAT registration threshold from Denar 2 million to Denar 3 million of annual turnover as from 1st January 2022 and application of the same profit tax exemption threshold as the one applicable for annual turnovers of up to Denar 3 million - Besimi said.

Minister of Finance also announced the start of the process of reducing the parafiscal charges up to 75% and their adjustment to the size of economic entities, through a dialogue with the chambers of commerce.

Besimi also announced the direct support to be provided by the Government to domestic and foreign companies. 

- Direct support will be provided to domestic and foreign investments in the amount of EUR 300 million from the national budgets and by direct allocation of EUR 300 million expected to come from the European Funds. Government will keep increasing the scope of financial support for domestic companies by 25% year on year, under the Economic Growth Plan. The establishment of a special equity fund will create significant incentives for the entry of foreign investment funds - Besimi pointed out in his address. 

He also stressed that special attention will be put on accountable and transparent operations, as well as that a so-called white list of taxpayers, i.e. companies that pay their taxes on a regular basis, will be introduced. 

- Transparency and accountability in public financial management must be one of the main pillar of this system. During the past years, transparency was a ”key word” in all political matters, however, its real value as regards public finances entails highest degree of fiscal control. We will provide the relevant information to the public in a simple and generally understandable manner, and the public will judge and evaluate whether such decision is right, justified and legitimate. It is the citizens who employ the MPs, the ministers and the other officials, the citizens are the ones who make value judgment of their operations, as well as those who set the direction of the actions taken by the institutions - Besimi said.