Taxes are considering whether to reinstate the 10% penalty for non-payment of income tax installments

2026-07-21 07:33:00, Aktualitet CNA

Taxes are considering whether to reinstate the 10% penalty for non-payment of

From January 1, 2023, businesses will not pay a 10% penalty for failure to pay quarterly profit tax installments on time, a measure that was intended as a relief for businesses.

Based on an amendment to the tax procedures law, "Failure to pay on time the preliminary installments of corporate profit tax and personal income tax from business and self-employment, according to the legislation in force on income tax, is punishable by a fine of 0.06 percent of the amount of the unpaid obligation for each day during which the payment is not made, but not more than 365 calendar days.

Sources from the Tax Directorate told Monitor that the administration is considering whether to reinstate the 10% penalty. This review is related to the fact that a decline in income from profit tax has been observed, which is not considered to be related to the real situation of businesses, judging by the performance of sales and income from value added tax.

According to official data from the Ministry of Finance, for the first 6 months of this year, income tax revenues were 31 billion lek, a decrease of 6.5% compared to the same period a year ago, or 2.2 billion lek less. For the same period, net income from VAT increased by 10.6%, reaching 120.7 billion lek (+11.6 billion lek), which indicates good sales performance and improved consumption.

Insurance revenues also increased by 13.3%, reaching 99.6 billion lek (+11.7 billion lek), driven by the increase in the minimum and maximum wage, but also the average wage in the country, and influenced by actions to formalize the labor market. Taxes claim that the reaction of businesses to the request for formalization has been positive so far.

However, the removal of the 10% penalty for profit tax seems to have encouraged entities not to rush to pay the installments of this obligation and to preserve liquidity.

As a result, the tax authorities are conducting an analysis of the situation and will decide by September what measures they will take. Although the goal is not to impose penalties, the tax authorities currently have no other means to encourage entities to pay, other than calling them.

Although the business will be forced to pay tax on its profits at the end of the year, the high annual amount may put it under pressure to try to find ways to pay as little as possible.

Revenues increased by 12% for the first 6 months

According to fiscal statistics from the Ministry of Finance, budget revenues for the period January-May reached 410.6 billion lek, an increase of 44.6 billion lek on an annual basis. Of this increase, about 17.8 billion lek came from taxes and customs (VAT, personal income tax), 11.7 billion lek from special funds (social and health insurance.

During this year, local taxes, influenced by the infrastructure impact tax, which is given for construction permits, are having a strong impact on budget revenues. This item doubled in the first 6 months, bringing 28.9 billion lek to the budget, or 14.5 billion lek more (contributing to almost a third of the increase in total budget revenues), an indicator of the high surface area of ??construction permits being given.

Non-tax revenues had a negative contribution of -1.4 billion lek./ Monitor