Finance Minister Petrit Malaj has defended Albania’s proposed 2027 fiscal package, saying its overall effect on state revenue will be neutral or slightly negative. He presented the changes to the Economy Committee.

Malaj said the package aims to redistribute revenue, protect vulnerable groups and support the middle class. Higher dividend tax revenue will help fund an increase in the salary tax threshold from ALL 200,000 to ALL 300,000.

The plan also reduces value-added tax on basic products from 20% to 6%, while raising the standard rate from 20% to 21%. Malaj said the lower registration threshold for value-added tax, reduced from ALL 10 million to ALL 5 million, would help cover the resulting budget shortfall.

Meanwhile, shifting the circulation tax from fuel to annual vehicle taxes will leave an estimated ALL 5 billion gap in state revenue, he said. The minister added that higher tobacco excise duties would provide the package’s only additional revenue, in line with European Union requirements.

Malaj said the combined measures would leave the budget impact at zero or around ALL 300 million below the previous level.

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