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E-TJERA

The education infrastructure tax in Tirana is increasing, businesses and families will pay 4.4 million euros more

Politiko 2023-12-06 08:14:10

The education infrastructure tax in Tirana is increasing, businesses and

Tirana's businesses and families will pay more for the temporary education infrastructure tax over the next two years.

The municipality of Tirana, in the draft budget of the next year, anticipates to collect 926.5 million ALL in 2024 from this tax and 971.8 million ALL in 2025, from 747 million ALL which is the expectation of 2023. The increase in 2024 compared to 2023 is 24% more, while in 2025 the Municipality expects to collect 30% more income than in 2023.

In total, in the next two years 2024-2025, the obligations of families and businesses for the temporary tax of the educational infrastructure in Tirana are expected to increase by about 450 million lek, or 4.4 million euros more, in relation to the annual average paid during 2018- 2023 (724 million ALL). About 70% of the increase in revenue will be collected from the increase in business obligations for this tax.

The increase in the obligation for both the family and business categories has been influenced by the increase in the reference prices of apartments according to the decision published in the Official Gazette at the end of July 2023. In relation to the 2024 draft budget, the municipality of Tirana explains that the value of the temporary tax of the educational infrastructure is in the amount of 35% of the building tax liability for the same subject as a family or commercial subject. As a result, the increase in the liability for the building tax (which came as a result of the change in reference prices) has automatically increased the value of the liability for the temporary tax of the educational infrastructure.

For family members, the increase in the obligation for the education infrastructure tax has started to apply since August 2023, when the increased obligation for the building tax began after the increase in reference prices. With the July decision, the reference prices for the 32 cadastral areas of Tirana increased from 4 to 76% compared to the levels of the 2018 decision.

"At the beginning of 2023, the receipts from this tax were reduced by the approval of this tax for a new 3-year period and limiting its value to 35% of the building tax liability for the same subject. The expected level of realization for the year 2023 will be above the predicted value for the "Family" entities, taking into account the entry into force of the new VKM on 28.07.2023 and the application of reference price changes in August billings 2023 for the building tax and respectively for the temporary tax for the educational infrastructure.

For business entities, this change will not affect the expected value of realization for 2023 and the effect for the 5-month period will be noticed in the following year together with the forecast for 2024.

However, the change in the reference prices for residential apartments and therefore the reference prices for structures used for business purposes and the building tax forecasts for these subjects will serve as the upper limit of the forecasts for the temporary education infrastructure tax. it is underlined in the draft budget relation.

The temporary tax for the educational infrastructure in Tirana entered into force in 2016, both for the business category and for the family category. Initially, it was foreseen that this tax would be implemented until 2022, but then the Municipality of Tirana postponed its implementation for another 3 years until 2025.

For commercial entities, the obligation of this tax is collected by the General Directorate of Local Taxes and Tariffs. While the obligation from the family category is collected by the tax agent selected for this purpose, "Ujjesjellës Kanalizime Tirana" through drinking water bills. For the "Family members" category, the obligation is paid in 12 equal installments, for each month respectively, and its value is 35% of the building tax obligation.

In total, from 2018 to 2023, the Municipality of Tirana collected 4.3 billion ALL from this tax. While in total, from 2018 to 2025, which is the deadline for its implementation, 6.2 billion ALL is expected to be collected./ Monitor