During a visit to the “Luna shpk” shoe company for the Italian market in Dushk, he emphasized that this mechanism helps businesses to ensure liquidity and meet customer demands on time. The minister also discussed the challenges and the need for qualified labor.

“With Hëna, the energetic administrator of the Luna shpk company, which makes shoes for the Italian market,” Malaj wrote.

“Having many years of experience, she has employed about 90 workers, thus contributing to the development of the area. We talked about ways to overcome challenges, but also about finding a qualified workforce,” continued Minister of Finance.

“The timely refund of VAT has given her the opportunity to have liquidity and meet customer demands on time,” concluded Malaj. /a.f/p.s./

In his remarks at parliament’s regular session, Finance Minister reassured that all payments will be completed by the end of the year, despite a letter the Ministry of Finance has forwarded to the Constitutional Court regarding the case.

“As far as the tax paid by freelancers is concerned, the Ministry of Finance has stated from the very onset that the Constitutional Court ruling didn’t clarify what would happen with the collected revenue while the previous law was in force. After the Constitutional Court decision, the Ministry of Finance has asked the Constitutional Court to render an opinion on the law’s effects. The Court failed to give its opinion on the matter, suggesting that the revenue collected while the law was in force were legitimate, although the government demonstrated readiness to refund the tax rate paid by freelancers,” Malak told lawmakers.

A total of 6,450 taxpayers will benefit from the refund, which amounts to 501 million leks after the government approved a normative act last month to refund the 15% tax paid by freelancers and self-employed professionals by December 31, 2024.

The move follows a ruling by Albania’s Constitutional Court on June 27, 2024, which struck down Article 69 of the tax code. The article had previously imposed a 15% tax on freelancers.

Now that the tax has been abolished, affected freelancers can expect their refunds to be processed quickly. The government has reassured that all payments will be completed by the end of the year.

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In a press statement after a regular cabinet meeting, Finance Minister Petrit Malaj said that a total of 6,450 taxpayers will benefit from the refund, which amounts to 501 million leks.

Finance Minister announced that the reimbursement process is set to complete by the end of this year.

“With this decision, we are making sure the funds are returned to freelancers and self-employed professionals, and any obligations from the outdated tax law are wiped out,” Malaj said, adding that the refund process is projected to complete by December 31, 2024.

Asked by reporters whether the government would draft a new tax scheme on freelancers and self-employed professionals, Finance Minister announced that the government will assess all the exemptions and reduced tax rates to decide whether they will be reviewed or remain unchanged.

Malaj said that the process will be carried out in collaboration with the international partners

In June, the Constitutional Court struck down Article 69 of the tax code. The law has entered into force on January 1, 2024. The article had previously imposed a 15% tax on freelancers, a decision that was deemed unfair and discriminatory.

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In a social media statement, DP lawmaker Tabaku underlined that the Constitutional Court has issued a clear decision overturning the income tax on freelancers and self-employed individuals.

“Although the case was being examined by the Constitutional Court, the Socialist government kept sending notice to freelancers, asking them to pay the unconstitutional income tax and warning them if refusing to pay,” Tabaku said.

According to her, “around 10 000 businesses across the country have paid the 15% income tax they normally shouldn’t have paid.”

“State budget has collected over 10 million euros from 10 000 freelancers. The government should immediately start the procedures to refund this amount of money to these individuals,” sheadded.

Last month, the Constitutional Court ruled that the new taxation scheme was disproportionate and unfairly targeted freelancers and therefore freelancers should be taxed at the same rate as small businesses until 2029.

The Court found that the proposed tax rates for freelancers were not proportional to their income levels and placed an undue burden on this segment of the workforce. The judges argued that freelancers should be treated similarly to small businesses, which often have comparable earnings and expenses.

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Addressing a meeting with business representatives to discuss their recommendations in a bid to improve business climate in the country and improve dialogue with business community, the Finance and Economy Minister underlined that the government aims to reduce the VAT refund deadline to just 30 days within next year.

Ibrahimaj said that any VAT refund claim will be filed online only via the VAT Reimbursement Digital Platform.

“VAT refund system has been an open wound for business over the years. We have emerged from an era when VAT claims were reimbursed with a delay of one or two years. Any VAT refund claim is now processed automatically since March 7, with businesses having no longer to do paperwork and provide numerous documents, and without having to meet in person any of the administration officials of employees,”  she stated.

According to Finance and Economy Minister, the VAT refund deadline was 75 days in 2021, and it has been reduced to 45 days now.  She said that this fact indicates that the tax administration has improved the VAT refund deadline by 30%.

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