Albanians pay 482 million euros in 7 months - revenue from payroll tax triples
Albanian citizens pay a considerable amount in the form of taxes withheld from their salaries or real estate transactions.
According to data from the Ministry of Finance, personal income tax revenues for the period January - July 2025 amount to 48.2 billion lek or about 482 million euros.
From this source, 101 million euros were collected, or 26.5% more than in the first 7 months of 2024, making it the item with the largest increase among other revenues collected by the state.
On the other hand, if we analyze the historical data of the revenues generated for the 7-month period from this budget item, a progressive increase is observed from year to year. And compared to 2015 when the collected revenues were recorded at 165 million euros, the increase is 192% or 3 times higher.
But what were the factors that influenced this trend?
Over the last two years, a salary increase reform has been undertaken in the public administration, where the average salary exceeded 900 euros, causing the tax paid on the salary they receive to be higher.
This reform has also put the private sector in motion by indirectly encouraging wage movements, which has also led to increased consumption.
On the other hand, the anti-informality campaign undertaken by the government regarding the under-declaration of salaries had an impact, causing over 9 thousand businesses to react by declaring their employees' salaries with an increase in October 2024 alone. The campaign continued with a second round among those businesses that had not reacted.
The gradual increase in the number of contributors to the insurance scheme, mainly in private entities, which may have also come from the anti-informality campaign, has also led to an increase in the amount paid as payroll tax.
Meanwhile, the doubling of the number of employees who completed the Individual Income Tax Declaration this year, due to the reduction of the income declaration threshold to 1.2 million lek per year, has had a considerable impact.
In the personal income tax item, the highest contribution is made by the tax on salaries of employees in the private and public sectors, followed by the tax paid from the sale of real estate, which is at the level of 15 percent, as well as the tax on rents. This shows that in addition to salaries, the real estate sector has also had positive performance and the finalization of transactions, as well as the increase in the price of rents mainly in the capital, has caused the payment of taxes to be higher for those declared rents.
Also, a significant amount of space is occupied by tax on income from dividends and tax on income from interest.
Personal income tax is the second most influential item in the annual state budget, after VAT, and accounts for approximately 26.7% of total tax revenues.
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