The Albanian Parliament approved the draft law "On the Fiscal Peace Agreement", an initiative that has sparked strong debates at home and abroad.
Despite opposition from the European Union (EU), the International Monetary Fund (IMF), and the American Chamber of Commerce (AmCham), the bill received the support of the parliamentary majority, passing with 75 votes in favor, 20 against, and no abstentions.
International institutions had expressed concerns that the agreement could undermine the country's fiscal discipline, foster expectations for frequent amnesties, and create inequality between businesses that comply with the rules and those that benefit from the pardons.
The American Chamber of Commerce identified a series of issues with far-reaching legal, economic and fiscal governance impacts, related to factors such as high risk of violating fair competition; Real possibility of legalizing capital of dubious origin and money laundering; Reduction in the quality of tax administration; Serious economic and fiscal consequences on the state budget and encouragement of schemes to shift businesses towards lower rates.
AmCham also stated that the draft has legal problems and violates fundamental principles of taxation, as well as a lack of transparency and insufficient public consultation.
Earlier, the International Monetary Fund also spoke out against this initiative. IMF mission chief Anke Weber recently said that “we are concerned that some of the elements of the proposal could undermine Albania’s recent progress in tax administration and create some risks to fiscal compliance and fairness.”
However, the majority considered the initiative as a necessary step to close old obligations and normalize relations between the tax administration and businesses.
The approval of the "Fiscal Peace" comes within the framework of a broader fiscal package reviewed during the plenary session, where a total of 12 draft laws and the 2026 budget were voted on.
The draft law "On the Fiscal Peace Agreement" stipulates the agreement of the parties, i.e. between the business and the tax administration, in a 1-year agreement (with the right to renew up to 2 times), for businesses with gross income over 14 million lek per year, to calculate the tax prepayment on an increased taxable base.
So the business will not prepay any tax, but will calculate it on the taxable base consisting of the taxable profit of the previous year plus an 18% increase. If the actual profit at the end of the year exceeds the limit (calculating the profit of the previous year plus an additional margin of 18%), 5% will be paid on this excess.
Also, after the revision of the draft law "On the Fiscal Peace Agreement", the application of a 5% tax was added in case the business voluntarily corrects previous declarations, including the revaluation of the cash balance, the deletion of fictitious assets or liabilities, the declaration of previously undisclosed assets, the re-declaration of retained earnings and their distribution as dividends. For all these cases, there will be no fines, interest or late payment interest, provided that the taxpayer declares in advance that he will benefit from the agreement. /Monitor.al/
