Only last year, businesses accumulated almost 160 million euros in new tax debts. According to data from the General Directorate of Taxes, Albanian firms owed outstanding taxes of 146.8 billion lek, or roughly 1.3 billion euros, at the end of 2022, an increase from 134.9 billion at the end of 2021.
According to accounting expert Elisabeta Katia, this problem derives from both firms’ incapacity to fulfill their duties and the administration’s inability to restrict enterprises’ tax dodging activities.
“The reason why this debt grows, what type of tax it accumulates for, and which sector it accumulates in should be discovered first. With this logic of debt buildup in place, tax debt sensitization and prevention measures can be implemented “Katia stated.
The majority of these liabilities, 61 percent, are actual debt, 34 percent are penalties, and 5 percent are interest due to late payment. So, while the government intends to forgive tax evasion over time through tax amnesty, is there also potential for forgiveness of penalties and interest?
“Relief measures are far more beneficial to businesses than amnesty or other kinds that distort the market,” Katia added.
Statistics from “taxes” show that enterprises that have declared bankruptcy or shifted to passive status have created 65 percent of the overall bad debt, valued at 104.3 billion lek or more than 900 million euros.
When collecting these responsibilities becomes practically impossible, experts believe that collaboration between institutions and businesses is the most effective strategy to minimize tax burden.