Tax revenues from BP countries that applied a progressive tax model a few years ago (Montenegro, Kosovo, Albania, Serbia) compared to countries that applied flat rate taxation (North Macedonia, Bosnia, and Herzegovina) show a higher burden of 1.8% and 2.1% of GDP in the years 2021 and 2022, respectively.<\/p>\n
After these years, BP6 countries have started to modify their tax systems towards progressivity, as a need for more income, but also as a reason to increase the capacity in administration due to the pandemic crisis and the pressure on the budget in the following year 2022 from the war in Ukraine and the reasons behind it.<\/p>\n
In 2022 and a year before it is observed, that apart from Serbia that presents a high level of growth in the last 5 years, other countries have no visible effect even though they have presented progressive rates in the tax on income from work, but also from capital.<\/p>\n
The taxation model for capital and personal income is seen to have no connection with the burden of insurance contributions, or even indirect taxes.<\/em> Likewise, countries that already apply progressive tax rates have contribution burdens like the years before the application of progressive tax rates on wages (year 2019).<\/p>\n In the analysis of the burden of labor taxes and tax rates, the latter affect the average fiscal burden and the same is true for the average burden for the burden of indirect taxes. The design of the tax system, which is still maintained by taxes on consumption, is little focused on the distribution of the tax burden in direct taxes, since the expansion of the tax base is a challenge related to the fight against informality, the fight against populism for low taxes, as well as political patronage of administrations This fact between the comparisons for the same model, where on the one hand fiscal policies are compared through tax rates, while on the other hand fiscal burdens are compared, shows that the administration is still working below the capacities enabled by the fiscal legislation in the respective states, which among other things means the presence high rate of tax evasion.<\/p>\n In the total fiscal burden, according to the curves of the graph below, it appears that states that have low productivity in the collection of a component group of the total fiscal burden (eg insurance, and other taxes in Kosovo) are compensated by higher collections from another component group (Indirect taxes in Kosovo).<\/p>\n From the numerous studies conducted on informality in the labor market in the Balkans, there is always the concern of informality in the labor market that changes and decreases at slower rates than the forecasts and programs of the Balkan governments. A narrow base of direct taxes still indicates a still unfinished transition in terms of the larger contribution that direct taxes on capital and labor income (companies and individuals) should make to the budget.<\/p>\n All Western Balkan countries apply a flat rate of income tax, except Albania and Kosovo.<\/p>\n","protected":false},"excerpt":{"rendered":" Tax revenues from BP countries that applied a progressive tax model a few years ago (Montenegro, Kosovo, Albania, Serbia) compared to countries that applied flat rate taxation (North Macedonia, Bosnia, […]<\/p>\n","protected":false},"author":2,"featured_media":15444,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[9756],"tags":[9845,8505,9827,11759,8432,9905,8480],"class_list":["post-15446","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog","tag-balkans-en-2","tag-flat-tax","tag-informality-en-2","tag-progressive-tax","tag-tax-burden","tag-tax-rates-en-2","tag-tax-revenues"],"featured_image_src":{"landsacpe":["https:\/\/altax.al\/wp-content\/uploads\/2023\/04\/progresive-tax-714x445.jpg",714,445,true],"list":["https:\/\/altax.al\/wp-content\/uploads\/2023\/04\/progresive-tax-463x348.jpg",463,348,true],"medium":["https:\/\/altax.al\/wp-content\/uploads\/2023\/04\/progresive-tax-300x189.jpg",300,189,true],"full":["https:\/\/altax.al\/wp-content\/uploads\/2023\/04\/progresive-tax.jpg",714,450,false]},"yoast_head":"\n
\nAlbania since 2014 and partially Montenegro and Serbia since 2018-2019 apply a progressive personal income tax system, which still carries the acute and still unaddressed problem of the expansion of the narrow base of capital and labor taxes. The Balkans is characterized by fiscal policies that are focused on the stability of the profit tax rate, a tendency to adapt progressive taxation for personal income, a slight reduction in the rate of social contributions.<\/em><\/p>\n
\nBy comparing the level of the fiscal burden for direct taxes in the Western Balkans with the EU-28 average, the difference is more than double.<\/p>\n