What is the Self-Employed Tax Act and why is there so much opposition?
2024-04-29 09:47:04
TiranaPost
A new law, the one on the Tax of Free Professionals is the epicenter of the debates of the last days.
On the one hand, the government claims that it is fighting tax evasion, that there are people who hide their income by being self-employed, and that there may be many such cases, but the duty of a state is to track abusers and not to tax the righteous. Fight evasion, those who abuse a Nipti number, and hide taxes and not free enterprise that uses the brain.
On the other hand, some interest groups have opposed it and the law has been sent three times to the Constitutional Court. The matter will be considered on May 21.
From the opposition, the strongest voice in opposition to this law is Jorida Tabaku, who recently posted this video of a freelancer and writes:
“Coders/Programmers who work on foreign contracts and are national assets in the age we live in are taxed by an unfair system and unconstitutional "Freelancer Tax" law! They tax them for a profit that has not been made!", writes Tabaku.
What is the law "On income tax" for free professions?
With the start of implementation from January 1, 2024 of the "Income Tax" law, the profits of self-employed businesses will be taxed from 15 to 23% after deducting expenses from annual income.
The Tax Administration has sent a letter to businesses informing them that they are part of the list of free professions approved by the government, therefore from January 1, 2024 they will be taxed at 15%.
In the tax letter sent to self-employed businesses, it is clarified that for the calculation of the preliminary tax of 2024, the data that this category of businesses will declare for the income and expenses of 2023 will be used. Specifically, the data declared for the income , the expenses and the taxable profit, which the businesses will declare for the year 2023, will be the subject of assessment by the Tax Administration for the calculation of the preliminary profit tax during the year 2024.
About 29 thousand self-employed businesses will pay the progressive tax from 15 to 23%
MFE calculates that up to 90% of all businesses (divided according to 3 categories, such as: self-employed, natural persons and traders) are included in the band of annual income up to 14 million ALL per year that will be taxed at a rate of 15%.
The other category of businesses that are included in the annual income over ALL 14 million will be taxed at the 23% tax rate.
How will the prepayment be calculated, which will be based on the activity of 2023, when the law had not entered into force and the freelancers have not kept the accounting in accordance with a law that had not entered into force yet?!
What happened in April this year?
In April, the declarations for the so-called "Preliminary installments of tax on personal income from business" were published in the system for professionals.
First , there was ambiguity in the terms used, forcing the administration to delete the evaluation notice from the system.
Secondly, with the calculations for the simplified tax prepayment by the tax administration, the 30% deduction of expenses was not taken into account, but only the expenses declared by the business, causing the installments to be quite high in relation to the preliminary calculations of the business, based in the logic of the law.
Thirdly, the period of the calculated and published tax installment was unclear and the 12-month payment was compressed into 9 months.
Law taken three times to the Constitutional Court
The income tax law has been taken to the Constitutional Court by three interest groups. The initiators of the complaints estimate that the law violates equality between taxpayers, the principles of the rule of law, legal security and violates competition.
In February 2024, for the first time, the repeal of the law by the Constitutional Court was requested by 37 deputies of the DP parliamentary group.
In March, another request was sent to the Constitutional Court by the Institute of Certified Accountants (IKM) and the Institute of Certified Accounting Experts (IEKA).
April 19 filed in the Constitutional Court, massively joined by 400 professionals, such as: lawyers, translators, financiers, property sales agents, etc., as well as business associations.
