FLASH
Shkruar nga Klodian Tomorri
Today, the picture of the mess is this. If you are a billionaire who grabs public lands on the coast, you pay zero taxes even when you earn millions of euros. If you are a breadwinner and have a salary that you can eat with, you pay 13 percent. If you have an income that allows you to have lunch out once a month with your family, you pay 23 percent.
Hundreds of thousands of citizens who earn their income from employment are being asked these days to fill out and sign the so-called personal status declaration. This is the second declaration they must sign. The first is the annual personal income declaration, otherwise known as the diva.
Declarations upon declarations. This is the fish of Edi Rama's honest tax, which will now force citizens to re-enter schools just to fill out tax declarations that the government requires.
The personal status declaration is a document that serves two purposes. First, for taxpayers to claim deductions from the tax base. While the second reason is to make it easier for the Tax Authorities to crack the progressive whip on those who do two or more jobs at the same time. But let's get back to the first purpose.
The tax deductions article is a tangle of wedges that could only be constructed by a few wedge minds. Just look at what it says;
A personal income taxpayer with income from employment and/or business may
deduct from the tax base for the tax period:
a) an amount of 600,000 lek if the annual income is up to 600,000 lek, or an amount
of 50,000 lek per month if the monthly income is up to 50,000 lek;
b) an amount of 420,000 lek if the annual income is over 600,000 lek up to 720,000
lek, or an amount of 35,000 lek per month if the monthly income is over 50,000 lek up to
60,000 lek;
c) an amount of 360,000 lek if the annual income is over 720,000 lek, or an amount
of 30,000 lek per month if the monthly income is over 60,000 lek;
ç) a compensation amount for each dependent child under 18 years of age of 48,000 lek.
2. The personal income tax payer with annual taxable income from
employment and/or annual taxable income from business less than 1,200,000 lek may
deduct, in addition to the individual amounts under point 1 of this article, current expenses for the education of
his dependent children, up to a maximum of 100,000 lek.
But it doesn't end there. To get the government's small deductions, there's another ordeal.
A personal income taxpayer with income from employment, through a
personal status declaration, may claim personal deductions from his payroll tax agent on a
monthly basis, in the amount of 1/12 of the amount referred to in letters “a”, “b” and “c” of point 1 of Article
22 of this law. The personal deduction may be claimed only once in a tax year.
The taxpayer, who claims the personal deduction or part thereof, may not claim it more than once
in a month.
Deductions other than personal deductions in accordance with letters “a”, “b” and “c” of point 1
of Article 22 of this law, may only be claimed through the annual income declaration.
Bracket under bracket and tooth upon tooth. The ladder of progressive madness. Imagine an employee who has a salary of 1 thousand euros per month, what does he have to do to figure out the equation of the tax fool? Thousands of hours of energy spent and hundreds of thousands of pages of declarations filled out.
In short, the tax code is turning into a nightmare, based on bad international experiences. The United States is one of them, where completing so-called tax returns is one of the biggest problems for the average citizen.
But the worst thing about progressivity is that bureaucratically it only gets heavier. The same goes for the principle of handcuffs, which get tighter as they come. This is because complexity imposes more complexity. And year after year, more bureaucratic procedures are added to the tax system.
Today, the picture of the mess is this. If you are a billionaire who grabs public lands on the coast, you pay zero taxes even when you earn millions of euros. If you are a breadwinner and have a salary that you can eat with, you pay 13 percent. If you have an income that allows you to have lunch out once a month with your family, you pay 23 percent. The cycle of madness is best closed. If you are a corporation or concessionaire that earns 80 million euros a year, you pay 15 percent at the statutory rate and much less at the real rate.
This is the folly of the honest tax and the heavy bureaucratic gear behind it. A folly that must end. The tax system does not have to be a nightmare for citizens. The simpler it is, the more wonderfully it functions. A rational state would leave out the vital minimum of survival and then tax everyone else the same, regardless of the source of income and the number of jobs they do.
Whereas the concern for injustice could target a limit for abnormally high incomes. A threshold of 200 thousand euros per year, precisely to capture abnormal salaries that come as a result of perverse incentives in the markets or the exchange of corrupt favors. That is enough and it is much fairer than the progressive mess that is actually a criminal regressive taxation system. 23 percent for the worker and 0 percent for the billionaire. But this is regulated only by vote.
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