Investment Council Meeting: Addressing Private Sector Challenges in Tax Administration, Innovation, and Productivity

The Investment Council (IC) held its first meeting of 2024 under the chairmanship of the newly appointed Minister of Economy, Culture, and Innovation, Mr. Blendi Gonxhja. The agenda focused on addressing productivity challenges facing entrepreneurs, particularly in relation to fiscal policy and administration, aiming to propose solutions to enhance national competitiveness in line with the ERP 2024-26 and the Balkans Growth Plan. Additionally, this marked the debut meeting for eight newly elected business members (ICC Albania, FIAA, Amcham, AAB, WECA, Confindustria Albania, HBAA, AECA), who will contribute to future debates over the next two years.

Minister Gonxhja highlighted progress in modernising government-business interactions through enhanced communication with tax administration and the widespread adoption of electronic services. While acknowledging some positive outcomes of fiscal reforms, he also emphasised the importance of balancing formalisation and innovation to support entrepreneurs. In addition, Minister Gonxhja highlighted the significance of policy interventions in developing long-term revenue collection strategies and promoting engagement and transparency across sectors to drive sustainable economic growth. 

During her intervention, the Minister of State for Entrepreneurship and Business Climate, Ms Delinaj Ibrahimaj, highlighted the potential for local corporations to invest in start-ups to boost productivity and expressed support for the establishment of business advisory services to facilitate access to and utilisation of available funds in Albania and the European Union.

The Secretariat presented key findings from its analysis, highlighting challenges in four main areas: interaction with tax administration and fiscalisation, informality, productivity, innovation, and regulatory burden. Some of the proposed recommendations include addressing fiscal instability and tax administration, improving formalisation, stimulating business innovation through measures like accelerated depreciation, and raising awareness among businesses about the benefits of innovation and research and development to enhance productivity and competitiveness.

During the open discussion session, various business representatives, including CCI Tirana, ADBC, FIAA, AmCham, WECA, ICC Albania, and ATA, acknowledged positive steps regarding the establishment of the new Ministry of Economy, emphasising the importance of policies supporting Made in Albania products, electronic services, and fiscalisation. They strongly highlighted the necessity for fiscal stability, access to a quality labour force, support for business innovation and digitalisation, and a fair tax regime. Additionally, they called for legal and regulatory certainty, support for cluster initiatives and innovation centres to aid small and medium-sized enterprises, improved legislative processes, streamlined access to EU funding, knowledge transfer for talent attraction and innovation, partnerships for grant access assistance, and a sectoral approach to AI.

Meanwhile, representatives of developing partners in Albania emphasised the importance of aligning tax policies with EU directives for stability and predictability, addressing informality and tax exemptions to ensure a fair tax regime. Additionally, they underscored the significance of targeted government interventions to prioritise transparent and easily understandable schemes to enhance productivity and foster innovation, complementing initiatives like the EU for Innovation Programme.

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Full materials for this meeting will be published in the next few weeks in our dedicated section.