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Raising the minimum wage/ Experts: The entire progressive taxation scheme must be overhauled

2023-03-06 21:28:21Biznes SHKRUAR NGA REDAKSIA VOX
Raising the minimum wage/ Experts: The entire progressive taxation scheme must
Erald Pashaj

From April 1, the government decided to increase the minimum wage to 40,000 ALL. From 2013, through this instrument, the minimum wage has increased by 60% from 24 thousand ALL.

But the increase that will be applied recently with 6 thousand ALL is the highest in 27 years.

According to employment experts, the intervention is positive, but according to them, the frequent change requires more planning and transparency.

"They must be planned in advance because there are also some businessmen who do the calculations. Apart from some small subsidies that the agro-processing industry and agriculture will receive, they have increased costs, because they will only be subsidized for social security. Everyone's question is why the increases are always so frequent and so small, and the second problem is transparency. So, why the increase to 4,000 ALL and not 4,500. Every decision that is made should be seen in a more complex system than with a populist eye", says Erald Pashaj.

With the intervention in the minimum wage, the scheme of progressive taxation changes again, while the limit of the maximum wage increases. Experts believe that the scheme needs revision

"The time has come to completely revise the personal income tax scheme with all these patches that have been made over the years. Our scheme is administratively very complex and is very unfair to the middle class. The taxation scheme is moving to a level with the pension scheme. Today, there is not an individual in the Republic of Albania who draws his own pension. To have the ability to sit down and say, I have paid contributions for 35 years, how much is my pension", Pashaj explains.

The government brought the decision closer in time, also due to inflation conditions, as it initially predicted that this salary level would be reached at the end of 2024. In addition to the direct impact on over 35% of the workforce in the country, this increase will also strengthen the pension scheme./Tch


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