TIRANA, Dec. 28 (Xinhua) -- The Albanian Assembly on Saturday finally approved the 2014 fiscal package, with the opposition voting against it, according to ATA.
"The 2014 budget has been built on the basis of a new fiscal policy. Keeping to the electoral promise, we have removed the 10 percent flat tax and applied, instead, the principle who earns more pays more," Finance Minister Shkelqim Cani said in parliament.
"The new fiscal package serves the stabilization of economy. It is aimed to generate an addition of around 18 billion leks (176 million U.S. dollars) of tax and customs revenues. This fiscal burden is distributed between businesses and individuals," Cani added.
The fiscal package 2014 introduces some novelties, including the increase of profit tax on corporations, in the country's tax system.
The ruling majority appreciated this step fair and in line with the principle "Who gains more, pays more", but the opposition regarded it as a heavy blow dealt on the business and forecasted investment fall and unemployment increase.
Former Finance Minister Ridvan Bode said the two instruments the government has chosen, increase of taxes and public debt, will only accelerate the country's economic collapse.
While Cani said the new package is in function of stabilization of economy because it aims to generate additional incomes from taxes and customs.
This fiscal burden is distributed between businesses and individuals.
The new fiscal package carries the introduction of progressive tax. All the individuals getting a wage up to 30,000 leks will pay no tax, but those who get up to 130,000 leks will have to pay 13 percent tax on the amount over 30,000 leks and those getting higher wages will pay 23 percent.
It means that wages under 130,000 leks will pay less tax as compared to the actual 10 percent flat tax scheme. A total of 97 percent of the employees benefit from the new scheme and only 3 percent of them will pay higher tax.
Likewise, medicaments and healthcare service will be cheaper for the Albanian patients because lifting of the 10 percent VAT will bring a 10-percent reduction of the price of medicaments.
Meanwhile, tax on movement of vehicles gets increased into 10 lek/litre per oil and 10 lek/litre per petrol as compared to the current 7 lek/litre. It will have a 5.5 billion leks affect into budget.
In addition, according to the new fiscal package about 60,000 small businesses in Albania will be exempt from tax beginning from Jan. 1, 2014. But, profit tax on big business gets increased into 15 percent from the 10 percent flat tax it used to be. (1 U.S. dollar = 102 leks)