Financial effects from the approval of the 2023 fiscal package for individuals, businesses, and the State Budget

From the calculation summarized according to the table, for the four tax laws that also have direct budgetary and financial effects for individuals and businesses beginning from fiscal year 2023, according to the results that coincide in the main parts (except for the draft law on VAT) with the calculations of the MFE, it results that:

1. For income tax
   – the negative effects for self-employed individuals will be 2 billion ALL per year from the taxation of free professions and businesses according to progressive brackets of incomes, calculating a corrected effect from tax erosion (tax avoidance and tax evasion).
   – For the Albanian’s businesses, there will be a net benefit from saving a part of them from exemption from the simplified tax on the profit on the small business in the beneficial value of no more than 350 million ALL per year
   – From the increase in the taxable salary threshold, there will be a benefit from employees plus one billion lek per year, which until 2022 was kept from their income from work.
   The effects on the state budget are calculated with a net profit of 650 million ALL.
2. For excise duty
   – positive effects for individuals with the exemption of excise duty for electric vehicle accumulators is calculated with an annual impact of ALL 50 million.
   – the negative effects for the beer manufacturing and importing businesses are 262 million ALL per year, with an increasing impact on the price of beer and even on a decrease in consumption.
   The net effects on the state budget are calculated with a benefit of ALL 212 million
3. For VAT
   – the effects of the exemption for 2023 of firewood, heating pallets, etc. There is a benefit for individuals of 50 million ALL for the full year
   – the effect of the exemption from VAT of the import/supply within the country of electricity that will be sold from the platform of the Albanian Energy Exchange is calculated according to ALTAX experts in a net value for the budget of 300 million ALL per year
4. For national taxes
   – the effects of removing the tax for the milk whey product and the tax for milk cream are calculated with a benefit for businesses at 10 million ALL per year

In closing, in the calculation of the positive and negative effects for business and individuals, as an impact from the adoption of the laws that make up the 2023 Fiscal Package, from the resulting comparative impacts with 2022 it appears that:

Individuals

950 million ALL less for self-employed individuals in professional services as an increased burden from inclusion in the income tax scheme
1 billion ALL benefits for employees who belong to the minimum wage band from forty thousand to 50 thousand ALL/month, as a monthly income that on average corresponds to seventy thousand employees with 1,200 ALL more income per month, from this fiscal measure
ALL 950 million less will remain as disposable income for individuals in 2023 because of the fiscal policy.

Business

105 million lek net benefits from (a) maintaining the simplified zero percent profit tax until 2029 for a more limited category of businesses, (b) increasing the beer excise for small producers and importers, (c) exemption from VAT of firewood business, (d) removal of milk whey tax.
105 million more ALL are added to businesses from the effects of the fiscal policy for 2023

Government Budget

1.14 billion lek benefits the state budget in net tax and customs revenue through legal changes after the adoption of three laws (except for the national tax law, where there is no benefit in the budget)