Personal income tax adds 40.8 bn lek in first half of 2025, a 26.6% year-on-year increase

In the first six months of 2025, Albania’s personal income tax brought 40.8 billion lek into the state budget—an increase of 8.6 billion lek, or 26.6%, versus the first half of 2024. Ministry of Finance data show the outturn is also 5.4 billion lek above the initial plan for the period, a realization 15.4% over target.

Why is this important: The overperformance strengthens the budget and reflects a healthier labor market and better tax compliance. Beating the plan by 15.4% signals continued formalization in wages and stronger administration of personal income streams.

Context: Officials attribute the positive performance to several factors: higher formal employment, improved declaration of wages in the private sector spurred by stepped-up tax controls, and pay rises in the public sector and key parts of the economy such as technology, construction and financial services. Digital administration—through systems like E-Filling and real-time fiscalization—has increased transparency and collection efficiency.

Beyond salaries, personal income from other sources—rents, dividends and self-employment—also contributed meaningfully to the six-month result. According to the Tax Administration, there were 10,523 more employees in January–June 2025 than in the same period of 2024, expanding the taxable base.

Next steps: Authorities will continue with digital oversight and employer audits to sustain compliance, while monitoring wage trends and non-wage personal income to keep revenues on track in the year’s second half.