245 million euros in unpaid employee contributions - Businesses do not pay their obligations on time. Years of work, "lost"
Many employees in the country, despite being in a formal employment relationship, face unpaid social and health contributions from their employers.
Referring to official tax data, there are approximately 24.4 billion lek or 245 million euros in unpaid contributions for employees over the years.
During 2024, the newly created debt from unpaid social and health insurance has increased by nearly 19 million euros, which is worrying for employees. According to the law, if employees do not pay contributions, despite being in an employment relationship, they are not recognized as years of work for pension purposes.
Meanwhile, businesses in the country have a total value of unpaid tax liabilities to the tax administration that is estimated at 162.5 billion lek.
Data from the General Directorate of Taxes shows that the majority are debts inherited over the years, as the debt balance on January 1, 2024 amounted to 155.2 billion lek, while on December 31, 2024, it reached 162.5 billion lek.
In other words, throughout 2024, tax liabilities have experienced a net increase of 7.37 billion lek or 74 million euros.
But how is the tax debt divided by item?
In the stock of unpaid liabilities divided by type of tax, VAT accounts for the largest share of the debt stock with 35% worth around 57.2 billion lek, followed by Profit Tax with 29% worth 47.2 billion lek. Social & Health Insurance unpaid on time for domestic employees accounts for around 15% of the total debt.
While other items have a lower weight, such as Withholding Tax at 6.4 billion lek, TAP at 2.7 billion lek and DIVA at 636 million lek.
Referring to the age of debt, liabilities with a maturity of over 2 years are calculated at a value of 137.6 billion lek and account for 84.7% of the total stock.
From the above data, it results that the principal of accumulated tax liabilities constitutes about 62% of the total amount of tax liabilities, while the remaining 38% of these liabilities consists of penalties and late payment interest.
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