The government has put forward a fiscal package that, if approved as proposed, would increase the burden on businesses at a time when enterprises are facing high costs, the euro’s depreciation, and pressure on competitiveness. According to the draft, taxes on profit and dividends will rise, while the threshold for inclusion in VAT will also be lowered.
Higher corporate profit tax and dividend tax
According to the government’s proposal for the 2027 fiscal package, the corporate profit tax for businesses will increase from 15% to 17%. Along the same lines, the tax on investment income will also change, unifying the rate at 15%, which in practice raises the dividend tax from 8% to 15%.
In the official justification, the increase in corporate income tax is presented as a way to achieve a more balanced distribution of the tax burden and to increase budget revenues. According to the Ministry of Finance, these two measures alone are expected to generate around 8 billion lek in additional annual revenue.
The budget gains, business pays more
Beyond the effect the government calculates on public revenues, the measure translates directly into less profit remaining for businesses. This affects the room for investment, business expansion, and employment, especially in sectors that have long complained about rising costs and weakening margins.
The draft argues that the increase in the corporate profit tax rate alone, from 15% to 17%, could bring in around 5 billion lek per year. But on the ground, this means new pressure on enterprises, in a climate where many operators are speaking of difficulties in maintaining competitiveness.
VAT: threshold drops to 5 million lek
Another change with broad impact concerns the VAT scheme. The government is proposing to lower the registration threshold from 10 million lek in annual turnover to 5 million lek, meaning that from next year businesses that until now were outside the scheme will also be brought into it.
This means that all entities with annual turnover above 5 million lek will have to pay 21% VAT and also face additional filing and tax administration obligations. According to official calculations, around 17,516 additional taxpayers are expected to be included in this regime.
The formalization argument and business objections
According to the accompanying explanatory report, lowering the threshold aims at greater formalization of the economy, expansion of the taxable base, and improved VAT administration. The government argues that registering more entities will help with transaction reporting and the cross-checking of data for stronger fiscal control.
But businesses have opposed this approach. According to a statement by a business association, the proposals in the 2027 fiscal package require serious discussion with sector representatives before approval, rather than one-sided decision-making. The reaction says that production and exports have for years been hit by the depreciation of the euro, rising costs, shrinking capacity, and job losses, while the new measures risk adding to the burden without addressing the real problems of the economy.
The fiscal draft presented by the government aims for more budget revenue, but the cost is expected to fall on businesses through higher taxes and the expansion of VAT.
The main debate remains whether these measures represent a balanced reform or simply a new fiscal tightening at the expense of entrepreneurship and employment.