Prime Minister Edi Rama has presented the main points of the fiscal package for 2027, announcing changes in the taxation of consumption, income and real estate. Among the key measures is a reduction of VAT on basic foods from 20% to 6%, while the standard VAT rate for other products and services is set to rise to 21%. RTSH
“We want more businesses, more companies, more small and large investments”, Rama said, stressing that the government’s goal is to narrow the economic and social gap between citizens. The Prime Minister said the VAT reduction on basic foods aims to ease the spending of Albanian families. According to him, the measure will bring families around 150 million euros a year, while the final list of products that will benefit from the reduced rate is expected to be set by a decision of the Council of Ministers.
Another important change concerns the tax on dividends, which under the package presented will rise from 8% to 15%. Meanwhile, Rama stated that the corporate profit tax for enterprises will remain at 15%, while small businesses will continue to benefit from zero tax on profits until 2029. The package provides for a new tax system for the digital economy, as well as stronger measures for individuals with considerable wealth. In this framework, the Prime Minister announced a super tax on apartments that are kept empty and not rented out, higher taxation for villas on the coast, and a super tax on luxury cars.
“The problem is not the wealthy, but the gap between those who have a lot and those who have very little”, Rama said, arguing that the changes aim for a fairer distribution of the fiscal burden. Alongside the proposed relief for the food basket, the package also includes raising the standard VAT rate from 20% to 21% and raising the rate for the tourism sector from 6% to 10%.
10 points of the Fiscal Package 2027
1. We are lowering the VAT rate on basic foods from 20% to 6% for 54 products, including, among others, meat, fish, tomato paste, eggs, flour, oils, sugar, pasta, fruits, vegetables and basic foods for infants. With this move alone, we are adding around 150 million euros a year to the pockets of Albanian families for food, which until now went to the state through the 20% VAT. On the other hand, the new Price List practice will be expanded and strengthened, to guarantee that the significant reduction in basket prices is protected from major abusers.
2. We are raising the standard VAT rate by 1% as a fair contribution through redistribution, or put differently, so that for all goods outside the basket, all of us contribute so that the basket for those who have the hardest time at the end of the month is guaranteed as a reasonable expense.
3. We are not raising the profit tax rate, which remains 15%, or put differently, it stays at the highest level in the region. Listen carefully: unlike what the corrupt screens and paid portals keep telling you, we tax the big players, meaning big business, at the highest rate in the Western Balkans for 10 years and more. But today we are increasing the tax on their dividends to the highest rate in the region as well. Going from 8% to 15%, it burdens big businessmen with a more honest tax on their profits, again in order to ease the burden on those who have less.
4. We are reducing the tax burden, and I smile naturally because there are 32,000 taxpayers who are a vital part of the middle class and have long demanded this move: raising the upper threshold of the income tax on salaries from 200 thousand to 300 thousand new lek. Until yesterday the economy did not allow this move; today economic growth gives us the opportunity.
5. On the other hand, we are introducing a new threshold for the salary tax at 700 thousand new lek, where the tax rate becomes 30%, primarily as an instrument to close the path of dividend evasion.
6. Likewise, we are lowering the threshold for applying VAT to any business with annual turnover above 5 million lek, because we cannot allow many small businesses to continue being abused as shells for big businesses to hide behind. This move should also serve as a warning to businesses below 5 million lek not to play with the invoices of the big players, if they do not want to enter the VAT regime next year. Meanwhile, our public commitment remains intact: zero profit tax for all small businesses until 2029.
7. We are also raising the VAT rate in hospitality from 6% to 10%, excluding agritourism from this increase. This measure should be a message to hotel owners, who are being asked to formalize as their revenues grow, and only grow, every year.
8. The time has come for a new taxation system for the digital economy, starting with those who live quite well, and I am very happy about this, with likes and followers, and continuing with genuine digital trade, for which a special project is being prepared by the Ministry of Finance. In parallel, other laws and decisions are being worked on, including some new measures moving in this direction, in solidarity with those who feel the pressure of rising living costs most, from economic growth and the rapid economic development that naturally creates gaps, and we must be there to narrow them. A super property tax for those who buy and keep empty apartments, refusing to rent them out (it is their right, but they must pay just as they do in some other European countries facing the increased cost of apartments); a super property tax for villas on the coast, as they too must pay more for their property, and a multiplied price for swimming pool water. This goes into another law, while this fiscal package will also include a super tax on luxury cars.
9. Meanwhile, the Specialized Income Control Bureau will be established at the Ministry of Finance, due to the fact that the income declaration form will change to follow the format of European Union states, or put more simply, for all individuals with relatively high incomes it will be very similar to the asset declaration form that all public officials have been filling out for years.
10. I left this for last because it is another news item many have long awaited, which again you must keep in mind. It is not the will of the government, nor my will, as we have always had that will, but the growth of the economy that brings it: We will remove the circulation tax from the price of fuel and automatically reduce the price of oil at the pump by 32 lek, while the tax will be reinstated on vehicles and collected through the relevant Road Transport Directorate. On the other hand, we will introduce a new circulation tax, as all of Europe has, for foreign cars entering the territory of the Republic of Albania.