TIRANA, May 27 /ATA/ – Director General of the Tax Administration Delina Ibrahimaj stated Thursday that small businesses should pay the generated profit tax instalments for 2020, while they will pay no such instalments for 2021 after the government decided to scrap the profit tax on small businesses with an annual turnover of up to 14 million leke.
In an interview with the Albanian Telegraphic Agency (ATA), Ibrahimaj explained that a Normative Act approved by the government on April 23, 2020, was designed to postpone payment of the profit tax instalments as part of a series of relief measures introduced by the government back then to soften the blow from the coronavirus crisis due to the stay-at-home orders and the total lockdown imposed in the wake of the Sars Cov-2 pandemic, but decision didn’t forgive the tax liabilities
“There has been a misunderstanding in interpreting the Normative Act dated April 23, 2020, at the height of the pandemic, when the government was committed to help not only small businesses, but also big business and workers affected by crisis,” Ibrahimaj said.
The Tax Administration Director noted that the Normative Act just postponed payment of the profit tax instalments for 2020.
“Profit tax is collected based on the profit rate declared a year earlier and the tax system calculates the expected profit that is then scheduled to be paid in instalments and not in a one-off sum, when declaration is submitted at end of March. This is a standard procedure for all businesses,” she said.
Ibrahimaj underlined that the reason why the government decided to postpone payment of the profit tax through the Normative Act in April 2020 was because businesses faced financial troubles back then and a majority of them were experiencing losses during 2020.
“It was an unexpected situation and this was why the government decided to postpone payment of the profit tax instalments,” she explained.
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