Foreign investments in Albania have dropped by 50% this year

Foreign investments in Albania have dropped by 50% this year

Tirana, October 15, 2014/Independent Balkan News Agency

Foreign investments in the current year in Albania have gone done by 50%. Experts say that this brings serious economic consequences in the long run.

Official data indicate that “there’s a fall of almost 50% in net value of foreign investments in Albania in the third quarter of 2014 compared to 2013”.

Confederation of Industries of Albania (Konfindustria) expresses its concern about this drastic fall.

Gjergj Buxhuku, General Administrator of Konfindustria, told IBNA today that Konfindustria believes that the 50% reduction of foreign investments in the Albanian economy is a result of the fiscal package that has entered in force at the start of 2014.

“The most tangible negative measure in the 2014 tax package for foreign investments is the increase of tax on profit for the business by 50%, taking it to a level of 15%”, says Mr. Buxhuku.

According to him, this situation comes in circumstances when neighbors are attracting investments thanks to the cautious taxation which has a falling tendency in order to stimulate foreign business to invest in these countries. “In all other countries of the region, which compete with Albania to attract foreign investments, tax on profit is between 9.5% to 10%”, says Mr. Buxhuku.

Meanwhile, the 100% rising progressive tax (7.5%-15%) of the tax in profit for businesses with annual turnover over and below 8 million ALL, has caused a worrying growth of tax evasion.

Konfindustria considers this situation as problematic and bearing long term consequences. Therefore, it has officially demanded to the government and political actors to bring back flat tax in the 2015 tax package.

“We will demand the reintroduction of the flat tax at a level of 9% to 9.5% for all business sectors that work in circumstances of free competition and do not benefit from the government privileges of closed markets and monopoly markets”. /ibna/