Report on the Tax Burden in 2023 in the Western Balkans, Albania and Kosovo and Tax Freedom 2024

Today, ALTAX comes to all its readers and followers with the important thematic publication Tax Burden in the Western Balkans – Albania, Kosovo…Tax Freedom Day 2024. This report deals with the tax burden in the Western Balkans region and for Albania and Kosovo in in particular, focusing on the study of the factors that influence and are influenced by the tax burden and its distribution through the annual budget.

The analysis of fiscal policy and administration inside and outside Albania and Kosovo, observed with the eye of the tax burden, provides the right information for businesses and investors to examine the effectiveness of government policies and initiatives for the economy. But another consequence of the work can be related to the impact on public debate and consultation at the time of the submission of fiscal projects for the distribution of the tax burden and the allocation of public expenses within the framework of the transparency of public finances.

This analysis serves to see which sector or country is burdened more with the tax burden and, on the other hand, how much this approach affects in function of political programs and in the interest of voters and the economy.

The object of data comparison is the income paid on account of the state budget by residents and non-residents. Taxes and customs duties included in this analysis are taxes administered by the central tax administration (including social security contributions), taxes and fees administered by local tax administrations, as well as customs duties according to the region where they are collected.

The results of this study are based on the income realized by the residents according to the residence where they are, without excluding the tax income from the large taxpayers of the country and the capital (included according to the address of the residence), who complete about 2/ 5 of the total tax revenue.

The calculation of the tax burden presented in this study aims to determine the effects that originate from taxes, both with approaches to public finance, but also to the economy and social policies. The tax burden can increase when the growth of tax revenue is greater than the growth in the income of individuals and businesses. If we were to refer to a tax system with optimal tax rates, we would actually have an optimal level of tax burden, which would not negatively affect producers or consumers, in terms of equality and neutrality, without forgetting tax justice.

However, in the analysis of the tax burden and its effects in recent years, it has been seen that the increase in the tax burden is not the cause, but the result of the need for increased public spending to maintain the socio-economic structure of countries, but also increased responsibilities of governments to meet the growing expectations of citizens in the shortest possible time.

The tax burden, being a link between tax collected and gross domestic product (GDP), can be influenced by many economic components. In fact, a state tax bill is one of the most important reasons for the increase in the tax burden.

The calculation of the tax burden, in the 12th edition of their publication, present the results of the methodology used by the experts of the ALTAX Center for the calculation of Fiscal Freedom Day, 2024 has already become a reference for researchers, journalists, experts and students. and aims to create a different approach in the Albanian economic and political environment.

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