What changes does the new law on income tax bring to self-employes and Freelancer Professions in Albania?

• Pages: 165-172

165

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Vol. 8 No.2

September, 2022

What changes does the new law on income tax bring to self-employes and

Freelancer Professions in Albania?

Dr. Anisa Angjeli

Faculty of Law, University of Tirana, Albania

Abstract

Income taxes have played a pivotal part of human civilization as an equalizer to the wealthy

and the working class. Income tax is still being levied in every country today, primarily to

raise revenue for government expenditures as well as being used for other purposes. The

reallocation of income taxes is a complex process that often involves balancing various

economic and social factors. As of January 1st, 2024, Income tax for self-professions in Albania

will tax in a progressive way, ranging from 15 to 23 percent. Meaning, that the entities with

income from 0 to 14 million will be taxed 15% and the entities with an income more than 14

million will be taxed 23%.

Moreover, In the context of income taxes, reallocation can refer to redistributing tax burdens

among dierent income brackets or sectors of society. This redistribution aims to achieve

equity while ensuring sucient revenue to fund government programs and services. The main

goal of this article is to seek out what dierences the new law will bring to self-employed and

freelance professions in Albania, particularly regarding their income tax obligations. Under

the revised legislation, there are adjustments to tax rates and brackets, directly impacting how

income is taxed for this demographic. To understand the implications of the new law is crucial

for this group to eectively manage their tax obligations and optimize their nancial aairs.

Additionally, the government may have specic aims in mind with these changes, such as

promoting formalization of the informal economy or increasing tax revenue from this sector.

Keywords: Income tax, self-employees/freelancers, tax burden, progressive tax.

Introduction

Income tax can be dened as tax taken on an individual’s and/or business’s earned

revenue, serving as a primary source of revenue for governments to fund public ser-

vices and infrastructure, ensure income redistribution, and promote social welfare

through targeted policies and programs. Income tax plays a crucial role in shaping

economic behavior, inuencing decisions related to work, investment, and consump-

tion. Through various deductions, credits, and incentives, governments can also use

the income tax system to focus on specic activities deemed benecial for the econ-

omy, such as research and development or renewable energy investment. Overall,

income tax serves as a fundamental tool for governments to achieve scal sustain-

ability, social equity, and economic prosperity. Additionally, the revenue income tax

provides the government with the option to sudden economic challenges and unpre-

dictable circumstances. 1

1 Rodriguez, M. (2018). Tax Law Enforcement and Deterrence Measures. 77 J. Crim. L. & Criminology 315.