10-year debts of businesses, towards cancellation/ The value that will be forgiven constitutes about a third of their total liability
The drafting of the new Fiscal Package has been completed and is expected to be submitted soon for consideration by the Parliamentary Committee on Economy, Employment and Finance. Among the main measures envisaged in this package is the forgiveness of tax liabilities of businesses dating back more than 10 years.
Prime Minister Edi Rama announced that the 2025 Fiscal Package will also include the partial forgiveness of tax liabilities incurred from 2015 to the end of 2019, provided that businesses repay part of the debt. According to him, 50% of the liabilities for the period of 5-10 years will be erased if the remaining part is paid immediately, or 25% in case of payment in installments within one year, also including the removal of fines and interests. For newer debts, incurred in the last 5 years, the deletion of fines and interest is foreseen, provided that the relevant tax or contribution is paid in full.
But, how much debt do businesses have to the state?
According to data from the Directorate for the Collection of Unpaid Tax Liabilities, at the end of 2024, Albanian businesses owed the state 162.5 billion lek, or about 1.6 billion euros. Over the past year, the debt stock increased by 7.3 billion lek, representing an increase of 4.7% compared to the beginning of the year.
Over the last ten years, the stock of business debt has increased year after year, with the only exception being 2017. In 2013, Albanian businesses owed the state around 155.2 billion lek.
The majority of these liabilities have been accumulated for a long time. About 84.7% of the debt is older than two years, while 64.4% is older than five years. It is precisely this part that can be included in the new fiscal amnesty. In value, this represents about 507 million euros that will be removed from the state's records.
So, short-term debts up to 1 year amount to about 14.5 billion lek, while long-term debts from 1 to over 5 years amount to over 148 billion lek.
The composition of the debt is dominated by value added tax (VAT) and profit tax, which together account for over 60% of the total. In third place are social and health contributions, with about 15% of the stock. Meanwhile, analyses show that 74% of the liabilities belong to passive businesses, which no longer operate in the market.
The anticipated forgiveness is not expected to have a direct impact on budget revenues, as it concerns debts that were not being collected. However, it helps clean up fiscal statements and clearly separate real obligations from those lost over the years.
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