The government has decided to abolish the simplified profit tax for small businesses aimed to help the businesses affected by the coronavirus (Covid-19) pandemic.

There are 5,311 taxpayers that will not pay the simplified annual tax of Lek 25,000 per year starting from January next year.

"The situation that our country is facing, as a result of the crisis caused by Covid-19, has made it necessary to create a facilitating legal framework for those taxpayers who face the greatest difficulties from this situation," the government has said in the document.

Two years ago, the Parliament decided to scrap the simplified profit tax for businesses with an annual turnover of up to Lek 5 million, while leaving a profit tax rate of 5% for enterprises with annual revenues up to Lek 8 million.

It has already been decided that this group of entrepreneurs will not pay profit tax and will also be exempted from the simplified tax.

The Council of Ministers approved the draft law and submitted it to the Parliament. According to the new measure, small businesses with annual turnover from Lek 5 to Lek 8 million will be relieved from a total tax burden of around Dollar 4 million every year.

According to the directorate of taxation, every taxpayer, who conducts a business that, during the fiscal year, generates a turnover of less than or equal to Lek 8 million is liable to simplified income tax payment for the small businesses.

The total of incomes generated by the small businesses implies every kind of income produced during the taxable period and includes, not only but also income produced by the supply of goods or services, income gained from the participations, income on interests, and income from the utilization of movable and immovable assets.