Prime Minister Edi Rama has unveiled a new fiscal package, which includes changes to the taxation of businesses, wages, food products, and property.

One key decision is to keep the corporate income tax for large businesses unchanged at 15%, while raising the dividend tax from 8% to 15%.

The package also reduces the Value Added Tax (VAT) on 54 essential food items and lowers the price of diesel by Lek 32 per liter, Rama said in a statement to the media on Wednesday.

Meanwhile, the government has announced new measures regarding the taxation of wages, property, and the digital economy, alongside a lowering of the mandatory VAT registration threshold from an annual turnover of Lek 10 million to Lek 5 million.

“We are establishing a new tax threshold for wages at Lek 700,000, with a tax rate of 30% - a measure primarily intended to close a loophole used for dividend-related tax evasion. Additionally, we are lowering the VAT registration threshold to include any business with an annual turnover exceeding Lek 5 million; we can no longer allow many small businesses to be exploited by serving as "shells" that enable large enterprises to conceal their activities. This move should also serve as a warning to businesses with a turnover under Lek 5 million: do not play games with the invoices of larger enterprises, unless you wish to be brought into the VAT regime next year. Meanwhile, our public pledge remains unchanged: a zero-profit tax for all small businesses until 2029,” Rama said.

“We are also increasing the VAT rate for the hospitality sector from 6% to 10%, while exempting agritourism from this hike. This measure is intended as a message to hotel owners - who are expected to formalize their operations - at a time when their revenues are consistently and steadily growing year after year,” the PM noted.

“The time has come for a new taxation system for the digital economy. This will encompass everything from those who earn a very comfortable living - which I am quite pleased about - through "likes" and followers, to actual digital commerce; the Ministry of Finance is currently drafting a specific proposal for this,” Rama said.

He also announced a "super-tax" on property for those who purchase and hold onto vacant apartments, “It is their right to do so, but they must pay - much like in other European countries currently grappling with rising housing costs,” Rama said, announcing also a "super-tax" on coastal villas - owners of these properties will also be required to pay more - along with a significantly higher rate for water used in swimming pools. “This will be addressed through separate legislation, while the current fiscal package will also include a "super-tax" on luxury vehicles," the PM noted.