Open Data Albania has researched the performance of values of personal income tax collected for 2005-2012. The data are taken from the Budget Tables of the Ministry of Finance. Personal income tax is calculated on the amount of income as for example income from wages, rents, dividends, bank interest, real estate transfer etc..

In the years under review, PIT has seen an upward trend both in absolute value and in percentage of total budget revenues. The year with the largest increase is the year 2007, year in which it was implemented a 10% flat income tax on individuals. This growth continued in 2008, when it was implemented a flat tax of 10% on profits of the companies.

After 2009 the upward trend follows but with one digit level. The flat tax as a tax system easier to manage and the increase of the tax base are two main reasons that marked impact on the growth rate of benefits provided by PIT. In 2007 the value collected from the Personal Income Tax grew by 73% versus the previous year. This increase was marked at 65% in 2008 to stay positive in subsequent years.


Source MF
Comments and Analysis: ODA



Source MF
Comments and Analysis: ODA

A ratio taken into consideration is the ratio of that values collected from the Personal Income Tax Revenue vs. Budget revenues. From 2005-2009 there was a growing trend of this ratio, following the same line with the upward trend of the values collected by PIT. But, starting in 2010-2012 a downward trend in this ratio can be noted, suggesting that the weight of PIT revenues in total revenues is declining.

If we compare the growth of revenue from personal income tax, and the increase in weight of these revenues to total revenues, we will notice that since 2005-2009 there is an upward trend of both curves, while from 2010 there is a downward trend for both.


Source MF
Comments and Analysis: ODA

According to the current legislation, for the period under analysis , as taxable income are considered the following items: Salaries and other bonuses in relation to the current working relationship, income deriving from the profits of a partnership or a shareholder in a company; income from banking interests or those of securities, income derived from copyright and intellectual property; income from emphytheusis, loans and leases, income from the transfer of ownership of real estate; income from gambling and casinos; income derived from the difference between the sales price and the purchase price of the shares that a shareholder owns and sells to another person; other income, not identified in the forms listed in this section, received by individuals resident or non-resident , but sourced in the Republic of Albania; taxable income, realised during the tax period by the local tax on small businesses subjects, which have a circulation of more than 2 million to 8 million per year, which are calculated as the difference between income, total expense recognized; income in the form of cash from the increase of capital from sources outside the company, not taxed earlier, while they have been taxing subject and that are not associated with official documents proving the origin of these revenues . Procedures defined by the directive of the Minister of Finance .