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Ekonomia

The change for high salaries, the limit that is taxed at 23% will increase to 250 thousand ALL/month! | Albanian newspaper

The change for high salaries, the limit that is taxed at 23% will increase to

The Minister of Finance, Ervin Mete, announced in the meeting with the CEOs of the American Chamber of Commerce that in June some relief measures are expected to be introduced regarding the tax on the salary for employees in the public and private sector.

Minister Mete did not provide further information on what reliefs are expected to be carried out, but "Monitor" has learned some details of the plan being prepared.

The most important element, which is being discussed, is that the rate of 23% of the salary tax be applied to salaries higher than 250 thousand ALL, from 200 thousand ALL, which is today. This change is expected to be introduced in June and will come into effect in July, along with salary increases for the administration.

The 23% payroll tax was introduced in 2014 as part of the socialist government's strategy to tax the so-called rich more.

Initially, the threshold above which the tax of 23% was paid was 130,000 ALL and then it gradually increased to 150,000 and 200,000 ALL, which is currently. This high level encouraged an avoidance scheme among professionals, who left the insurance scheme and opened businesses as individuals, where they paid minimal taxes.

These moves prompted tax to make several legal changes aimed at limiting these evasions, the latest being the implementation of the new tax regime from January 1, 2024 for progressive taxation with tax rates of 15% and 23% for the self-employed, natural persons and tradesmen of freelance services.

Currently, salaries up to 50 thousand ALL have zero tax, from 50-60 thousand ALL they pay 13% of the amount over 35 000 ALL, from 60-200 thousand ALL they pay 13% of the amount, over 30 000 ALL, and over 200 thousand ALL tax is 23% (see table).

In addition to the increase in the limit on the salary, finance is discussing other incentive measures for those who make the declaration of income to persons (DIVA) as a relief for those who have taken out loans for the first house for housing; Convenience for employees who have children in custody.

Another measure that is being discussed is that employees up to 25 years of age will have relief from taxes, but there are still no concrete details. Attention has turned to young people due to the fact that they are turning more and more to emigration, but also that official data show that unemployment among young people continues to be high. /Monitor/

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