Alban ULQINI & Gledia KOKOSHI
Abstract With recent changes in the fiscal package entered into force on 1 January 2014 the personal income tax on salaries and other employment-related remunerations has changed from a flat tax of 10% to a progressive tax. Despite the short time that the progressive tax on income from employment is reapplied in Albania, there are noticed a number of problems concerning its applicability and implementation. In this paper we will discuss some of the conceptual problems and legal gaps or inconsistencies that the application of a progressive tax on income from employment represents. Some of the main issues disused are: the application of progressiveness on a monthly basis can lead to incorrect implementation of the progressive tax; problems related to the application of progressivity only on one source of personal income; the opportunity for fiscal evasion; the monthly base upon which the maximum rate of tax on income from employment is applied is comparatively low, especially if you compare it to some Western European countries and at the end of this paper we will discuss other aspects that will improve the application of the scheme of the progressive tax on income.
Key words personal income tax, progressive taxation
JEL Classification H24, K34