Author: Denis Tahiri
The Albanian government faces the question of the fate of 5 million euros collected by 6,541 freelancers based on the now partially canceled law "On Income Tax". While the Constitutional Court ruled that the tax was applied disproportionately and violated economic freedoms, the process of returning the money remains unclear.
The invoices generated "automatically" in the spring of this year as a result of the "Income Tax" law faced a "river" of complaints, as there was no clarity on the formula that resulted in the amount to be paid.
" They were automatically generated in an abusive, uncalculated form, because when you generate this tax in the system for me, which is one million lek per month, you sir tell me that I calculated it in this form, but when you don't send a payment mandate, an order, or a calculation method, you simply tell me that's how much you have, that's how much the system calculates, but how does the system calculate it?" says Economics professor Rezart Prifti, who adds that he has a dentist, who says that this tax has cost them 6 million lek per month.
The law was appealed to the Constitutional Court by 38 opposition MPs, the association of accountants, auditors and the National Bar Association. The court overturned several points of the approved law with the argument that it was a non-proportional measure and violated economic freedoms.
" The court reached this conclusion by taking into account the tax scheme and in particular the fact that the 15% tax liability for this category of taxpayers began to be implemented immediately without giving them sufficient time to adapt to the new tax scheme," said Constitutional Court President Holta Zaçaj.
The court assessed that this law catches citizens unprepared and does not provide them with enough time to prepare, it violates human rights and freedoms as it takes unplanned income from their pockets.
But this brought another problem, a problem of 5 million euros which had already been taken from the citizens' pockets and had gone to the state budget. The question that required an answer was and continues to be how these money will be returned.
Officially, the Ministry of Finance says for the signal that: " by letter no. 11615/1 prot, dated 04.09.2024, it has submitted to the Secretary General of the Council of Ministers the request to address the Constitutional Court for the expression of this Court on the effects and consequences incurred for taxpayers until the entry into force of its Decision no. 52, dated 27.06.2024, for the profit tax installments prepaid by taxpayers".
So they said it differently, the Constitutional Court was asked if the state should return this money and how it can return it. But the constitutional court did not accept this request of the Ministry of Finance to interpret its decision on the partial repeal of the income tax law in order not to tax free professions.
The court stated that in its decision on June 27, it was specified that its decision entered into force on the day it was published in the Official Journal and since the decision that partially rejected the law was published in the Official Journal on August 5, its effects entered into force on August 5. Thus, starting from this date, self-employed people have the right not to pay tax installments, nor to be burdened with payment obligations.
But the impasse has not been resolved. According to the economy expert, Rezart Prifti, the state can return the money received from citizens through the same mechanism, or it can reduce it from the obligations that freelancers have for the following year. For him, the Constitutional Court should have given a solution to this situation, but that did not happen.
On the other hand, even for the lawyer Ledio Braho, the Constitutional Court should have given a solution.
" Article 76, point 4, states that the Constitutional Court may decide that the decision to repeal an act shall produce consequences for a different date, different from its entry into force. Point two states that the decision of the Constitutional Court that has repealed a law, as in our case, incompatible with the constitution, as a rule brings legal effects from the date of its entry into force, as a rule the date of entry into force is the date of publication in the official gazette", says Braho, adding that the Court had the obligation to regulate the effects of the law.
" The Constitutional Court had the opportunity to resolve it, it had the right, but I say that the Constitutional Court has made a policy, what was paid until August 5th is for the state to enjoy, after the 5th nothing is paid," he says.
For him, currently, it is the political will to return the prepaid taxes, but the lawyer Braho is skeptical about the return of this money.
While legal experts and economists express skepticism about the possibility of a refund, the Albanian government has not yet given a clear answer. With the entry into force of the decision of the Constitutional Court in August, the question of how, or if, the 5 million euros will be returned to the citizens remains unanswered. The lack of an official stance has raised doubts about whether taxpayers (who rushed to be regular in paying their dues) will ever get their money back.
This article was created based on input provided by individuals who have chosen to speak up. Share your story, empower others and be an agent for change. Visit the website: www.acqj.al/sinjalizo-dhe-ti/
