Advantages and Challenges of the New Fiscalization Process — Discussion with the Business

January 22nd, 2021

Tirana, 22 January 2021/ The new fiscalization process started implementation on 1 January 2021, and besides the numerous advantages it brings, businesses are expected to face some challenges during the first phase of implementation. In view of this, the Secretariat of the Investment Council, in cooperation with the General Tax Directorate organized a technical discussion with the private sector (around 60 representatives from local and foreign companies, associations, chambers of commerce, law firms, financial advisory firms, certified operators, etc.).

The topic of fiscalism was tackled by the Investment Council (IC) in August 2019, during the consultation phase of the respective draft law. IC members at the time proposed a postponement in the initiation of the fiscalization process, starting first with businesses providing goods and services to government agencies (B2G), then with B2B companies, and in the end with B2C companies—a suggestion that was taken into account by the government. In addition, some of the main business concerns at the time had to do with the limited time available for the implementation of the new procedures and the respective costs.

During her speech, the General Tax Director, Ms Delina Ibrahimaj, said that the fiscalization process is the currently the government’s biggest reform in the fiscal administration, with the expectation to reduce informality in the medium term up to 15%. Implementation of this reform will be a challenge for the business as well as the tax administration. Although businesses will have to deal with some new costs, they are expected to have inherent benefits in doing business, while the newly incurred costs will be dictated by the market—already liberalized in this regard. On the other hand, the spirit of the tax administration during this first phase will be that of advising and supporting.

During the meeting, business representatives expressed great interest in raising questions and comments of technical and general nature, which were mainly related to i) the use and manuals of the Selfcare platform; ii) corrections needed in the terminology used on the platform; iii) how the agro-business sector will be treated—being also the least formalized sector of the economy; iv) the additional and “hidden” costs of doing business (administrative, current software integration, new set up), etc.

The objective of this meeting was to clarify the initial business issues through a direct dialogue between the tax administration and business representatives — where a large number of questions were answered during the meeting. Meanwhile, upon request by the Chair of the Investment Council, Minister Anila Denaj, the Secretariat of the Investment Council will present a consolidated summary of business comments (some already submitted in advance in written) and the respective response by the GTD, for the purpose of creating a transparent dialogue between the parties.

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Law no. 87/2019 “On Invoice and the Circulation Monitoring System” as amended, starts the effects according to the following transition phases:

  • for cashless transactions between taxpayers and public bodies, the effects of this law begin on 1 January 2021. This affects around 7,600 businesses;
  • for cashless transactions between taxpayers, the effects of this law begin on 1 July 2021;
  • for cash transactions by taxpayers, regardless of tax liability or annual turnover, the effects of this law begin on 1 September 2021.

Investment Council is supported by the Ministry of Finance and Economy, the EBRD and the Swiss State Secretariat for Economic Affairs (SECO)