{"id":27343,"date":"2026-10-27T13:10:58","date_gmt":"2026-10-27T12:10:58","guid":{"rendered":"https:\/\/altax.al\/?p=27343"},"modified":"2026-10-27T13:12:11","modified_gmt":"2026-10-27T12:12:11","slug":"fiscal-package-2027-what-do-citizens-gain-and-what-risks-does-business-face","status":"publish","type":"post","link":"https:\/\/altax.al\/en\/fiscal-package-2027-what-do-citizens-gain-and-what-risks-does-business-face\/","title":{"rendered":"Fiscal package 2027, what do citizens gain, and what risks does business face?"},"content":{"rendered":"\n

The changes to VAT, the business registration threshold and personal income tax aim at higher revenues, formalisation and relief for certain categories. But the outcome will depend on the way they are implemented, the impact on prices and the new costs that businesses will have to bear.<\/strong><\/p>\n\n\n\n

The proposed fiscal package for 2027 introduces several changes that directly affect everyday economic life. The standard VAT rate is planned to rise from 20% to 21%, while a reduced rate of 6% is proposed for basic food products. For tourist accommodation, the rate will increase from 6% to 10%. At the same time, the mandatory VAT registration threshold is expected to be lowered from 10 million to 5 million lek in annual turnover, while the personal income tax brackets on employment income are being revised.<\/p>\n\n\n\n

From an economic perspective, these measures pursue several different objectives: supporting consumption, broadening the tax base, increasing public revenues and redistributing the tax burden. The challenge lies in the fact that the intended benefits and the possible costs appear simultaneously, yet are distributed differently among families, employees and businesses.<\/p>\n\n\n\n

Cheaper food, but how much will families actually benefit?<\/strong><\/p>\n\n\n\n

Lowering VAT to 6% on basic food products can help families meet everyday expenses. For low-income households, where food accounts for a large share of the budget, this measure is particularly important.<\/p>\n\n\n\n

However, a tax reduction does not automatically guarantee an equivalent price reduction. The benefit for the consumer depends on how traders, suppliers and producers respond, as well as on the level of competition. If part of the reduction remains in operators\u2019 margins, the effect on the household budget will be smaller than expected.<\/p>\n\n\n\n

On the other hand, raising the standard VAT rate to 21% may put pressure on the prices of goods and services that continue to be subject to this rate. Therefore, any assessment of the package must show the combined effect on the cost of living, not only the expected benefit from the list of food products.<\/p>\n\n\n\n

The VAT threshold is halved, but is it formalisation or a new burden for small businesses?<\/strong><\/p>\n\n\n\n

Lowering the mandatory VAT registration threshold from 10 million to 5 million lek in annual turnover is one of the changes with the most direct impact on small businesses. According to the accompanying report, the measure aims to bring around 17,516 new taxpayers into the system and is expected to generate a positive impact on VAT revenues of about 4.5 billion lek.<\/p>\n\n\n\n

These are important objectives for tax administration, but they require a full explanation of the calculation methodology. The number of businesses entering the scheme and the revenues expected to be collected must be supported by data on sectors, turnover, cost structure, VAT credit and the expected behaviour of taxpayers.<\/p>\n\n\n\n

VAT registration can improve the traceability of transactions and limit certain forms of tax avoidance. But real formalisation requires more than a new registration. It requires accurate reporting of turnover, issuance of invoices, equal controls and fair competition.<\/p>\n\n\n\n

For a small business, the change also means additional obligations for accounting, invoicing, declarations and liquidity management. These costs may be manageable for some operators, while for others they may weigh heavily on the activity. Where businesses have limited administrative capacity and low margins, there is a risk that a measure intended to promote formalisation will instead increase pressure for under-reporting or artificial splitting of activity.<\/p>\n\n\n\n

For this reason, the success of lowering the threshold should be measured by the real increase in reporting and fair competition, not merely by the number of newly registered businesses.<\/p>\n\n\n\n

Personal income tax: relief for some, higher burden on high incomes<\/strong><\/p>\n\n\n\n

The proposed changes to personal income tax on employment income provide for the expansion of the 13% tax bracket up to a gross monthly salary of 300,000 lek, from the current limit of 200,000 lek. For the bracket from 300,001 to 700,000 lek the rate is set at 23%, while for the portion of salary above 700,000 lek the marginal rate will be 32%.<\/p>\n\n\n\n

Raising the ceiling of the 13% bracket aims to ease the tax burden for a portion of employees with average incomes and qualified professionals. Meanwhile, the new marginal rate of 32% aims at greater progressivity for high incomes.<\/p>\n\n\n\n

These changes must be assessed through the net salary that remains available to the employee. The 32% rate applies only to the portion of income that exceeds the relevant threshold, not to the entire salary. To measure the real effect, comparable simulations before and after the change are needed, taking into account tax deductions and other applicable obligations.<\/p>\n\n\n\n

Another element is the impact on employers. Changes in personal taxation may affect wage negotiations, bonuses and the way employee compensation is structured. For qualified professions, the predictability and competitiveness of net income form part of the environment in which employment and professional development decisions are made.<\/p>\n\n\n\n

Tourism is expected to generate more public revenue, but also costs for competitiveness<\/strong><\/p>\n\n\n\n

Raising VAT on tourist accommodation from 6% to 10% aims to increase the fiscal contribution of the sector. But the economic effect is not limited to budget revenues.<\/p>\n\n\n\n

Depending on competition and demand, the additional cost may translate into higher prices for tourists or lower margins for operators. The impact may differ between large and small establishments, between high-demand destinations and areas that depend on a short season.<\/p>\n\n\n\n

To assess this measure, rates and fiscal conditions must be compared with competing destinations, as well as the sector\u2019s capacity to absorb the change without losing demand. The increase in budget revenues is only one side of the calculation; the other side is the effect on activity, employment and tourism investment.<\/p>\n\n\n\n

Beyond each individual measure, the central issue is the simultaneous change of several rules that affect prices, margins, administration and wages. Businesses must review invoicing systems, contracts, liquidity forecasts and personnel budgets. The shorter the time available to adapt, the higher the cost of implementation becomes.<\/p>\n\n\n\n

This makes process transparency essential. If the changes are drafted without sufficient consultation with experts, businesses, chambers of commerce and the relevant advisory bodies, there is a risk that practical problems will be identified only after the measures have entered into force.<\/p>\n\n\n\n

Accompanying reports should explain not only the objectives, but also the alternatives considered, the expected costs and the reasons why this particular form of intervention was chosen. Even the fact that a measure was not included in the analytical programme for the relevant year requires transparency about the reasons for its inclusion and the consultation process. This does not in itself prove a legal violation, but it makes documentation of the decision-making process more important.<\/p>\n\n\n\n

Broadening the VAT base increases the number of businesses that have declaration obligations and interaction with the tax administration. This can improve fiscal control, but it requires clear standards to limit room for unequal treatment.<\/p>\n\n\n\n

The risk of corruption increases when rules are unclear, controls are applied selectively and businesses have limited opportunities to challenge administrative decisions. The answer is not to abandon formalisation, but equal application of the law, understandable guidelines, traceability of controls and appeal procedures that work in practice.<\/p>\n\n\n\n

A predictable tax system reduces the scope for arbitrary interpretation and allows businesses to compete through productivity and quality, rather than success depending on the ability to cope with administrative uncertainty.<\/p>\n\n\n\n

What should be measured to judge the results?<\/strong><\/p>\n\n\n\n

Before and after implementation of the package, the public should be able to see several concrete indicators:<\/p>\n\n\n\n