Albania has announced it will implement a new online billing system to prevent businesses from circumventing tax payments and to boost revenue in the country, according to a report by Reuters.
The move would also align Albania with practices already established in the EU, which the country reportedly wants to join. When Prime Minister Edi Rama’s government came into power, it ran a campaign asking companies to register and issue receipts. However, many businesses in the country do not follow that practice.
“The main goal is to fight fiscal evasion through healthy legislation, technology and information [in] real time for every transaction, product or receipt,” said Finance Minister Anila Denaj.
The minister said that 1,600 hotels on a booking site were not registered with the proper tax authorities. Some hotels were shut down and only allowed to reopen after registration. She also noted that 160 retail fuel suppliers and 453 construction companies weren’t paying taxes either.
The government has notified businesses that they will be fined if they don’t provide receipts.
According to an International Monetary Fund (IMF), the so-called shadow market was responsible for one-third of economic activity from 1991 to 2015, the year that the country was a NATO member and EU candidate.
The new plan compels businesses to report all online transactions beginning on January 1. By 2021, all tax transactions will be electronic. Tax Department General Manager Delina Ibrahimaj expects the plan to be good for the country, with an approximate 15 percent increase in the collection of value-added tax and a more efficient tax collection process.
Corporate tax in the country is set at a flat rate of 15 percent. If a business has less than eight million in turnover, it is exempt from that tax. For a business to be tax resident, it has to have been incorporated in Albania or have a permanent establishment there.