By Muriel
A government can increase budgeted revenues with a few tweaks to an Excel spreadsheet. But it can't force the economy to grow by political decree.
This is the problematic philosophy behind the proposed fiscal package for 2027: more taxes on business, more burdens on consumption, and more uncertainty for investors.
Instead of a strategy that promotes production, competitiveness, and employment, the Rama government is choosing the administratively easiest path: to demand more from those who produce and consume.
The profit tax is proposed to increase from 15% to 17%, the dividend tax from 8% to 15%, and the standard VAT from 20% to 21%.
But behind these percentages lies a reality that the Ministry of Finance seems not to have treated with the necessary seriousness.
For every 100 lek of taxable profit that is fully distributed as dividends, the investor is left with 78.2 lek today. With the proposed rates, only 70.55 lek.
The combined tax burden increases from 21.8% to 29.45%.
What message is Albania giving to investors? Invest your capital, take the risk, create jobs, and the state will take an ever-increasing share of the profits!
Small businesses are also facing another blow. Halving the VAT threshold from 10 million to 5 million lekë means more obligations, accounting, and administrative costs for thousands of businesses.
The government calls it formalization. But formalization is not achieved by making it more difficult for honest business to survive.
Meanwhile, families are promised a VAT reduction on basic foods, but the standard rate is increased for a large portion of goods and services. Without an analysis of the net effect on prices, this social relief remains a promise that needs to be tested.
Even tourism, one of the engines of the economy, is facing the proposal to increase VAT on accommodation from 6% to 10%, precisely in a sector where contracts are negotiated months in advance.
But the biggest problem is not just the percentages. It's the way of governance.
How can such a broad package be drafted without publicly presenting a convincing analysis of its combined impact on investment, prices, employment and competitiveness?
Where are the economic simulations? Where are the alternatives? Where is the professional accountability of the Ministry of Finance?
A competent administration does not measure success only by the billions it expects to collect, but also by the economic damage it manages to avoid.
Albania needs public revenue. But before asking citizens and businesses to pay more, the government must prove that it is effectively managing the money it collects today.
Because the heaviest tax that the Rama government is imposing on the Albanian economy is not 17% on profits or 21% VAT. It is uncertainty.
And when a government replaces reform with tax increases, it is not building a stronger economy.
It is simply charging businesses and citizens the cost of its lack of economic vision.
