Government unveils “Fiscal Peace” plan: a new tax agreement model for Albanian businesses

The Albanian government has introduced a new initiative dubbed the “Fiscal Peace” plan, which aims to simplify tax obligations and provide a fresh start for businesses. Presented by Prime Minister Edi Rama in Elbasan, the program is not yet a government decision, but a proposal set to be discussed with stakeholders before formal adoption.

Why is this important: The plan is designed to ease the financial burden on businesses, resolve long-standing tax disputes, and reduce opportunities for corruption through simplified procedures and artificial intelligence in tax administration. According to the Prime Minister, this is not an electoral ploy but a substantive effort to build a transparent and fair fiscal environment.

Context: The initiative is built around three main pillars. These include:

• Agreed profit tax – A three-year agreement (subject to annual review) between businesses and the tax administration. Under this model, companies agree to a fixed profit tax rate of 15%, calculated based on the average net profit over the past three years, adjusted for predicted economic growth and the size of the business.

Example: A business with net profits of €100,000 in 2020, €110,000 in 2023, and €120,000 in 2024 would have an average of €110,000 as a base for calculating future tax obligations.

Any declared profit above the agreed amount will be taxed at a lower rate of 5%.

• Reevaluation of financial statements – Companies will have the right to review and correct their financial statements for the past five years. Any discrepancies identified and corrected during this process will be taxed at a reduced rate of 5%. This aims to help businesses clean up historical records and move forward without lingering tax concerns.
• Debt forgiveness and tax amnesty – All tax debts older than 10 years, including penalties and interest, will be forgiven. Businesses that choose to pay their full tax obligations in a single installment will receive a 50% reduction. Alternatively, businesses may enter into a 12-month installment plan and receive a 25% reduction in total liabilities.

What did he say: Rama emphasized that companies entering this agreement will be exempt from tax audits for the duration of the deal — a move he said will reduce both the bureaucratic burden and corruption. However, he also criticized business owners for not reporting corruption, calling them “co-responsible” for the persistence of bribery. Looking ahead, Rama noted that artificial intelligence would play an increasing role in detecting irregularities, adding transparency and fairness to the system.