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Government: Kosovo tax reforms will increase investments
Prishtina, KOSOVO - Changes in taxation policy ratified by the Kosovo government have been implemented to compete with other regional countries, respond to the demands of the business community, fight black market, increase national budget and encourage foreign investments, says Kosovo government.
Muharrem Shahini, a spokesperson from the Ministry of Economy and Finance, said the changes on the tax system will improve the economic environment in Kosovo and establish favorable conditions for local and foreign investors.
"The lowering of income tax will be implemented in all categories of taxpayers and this change will positively affect the increase of available income for each employee. Also the decrease in taxes will lower labor costs in Kosovo," said Shahini.
He said that the lowering of corporate tax along with income tax will decrease the costs of running a business in Kosovo. The decrease of these costs reflects in the ability to increase investments and expand business activity and as result it will bring positive effects in economic development of the country.
"The losses from the lower taxes on personal and corporate income will be compensated by increasing the value added and excise taxes. As result, the effect on the budget is expected to remain neutral", said Shahini.
Meanwhile, Safet Gërxhaliu, head of the Department of Foreign Affairs at the Kosovo Commerce Chamber, said the recent changes on fiscal policy should have been implemented earlier. "First of all, Kosovo will become a very attractive country for foreign investors, secondly [Kosovo] harmonizes its fiscal policies with its regional countries which is a precondition to attract investors" said Safet Gërxhaliu.
Gërxhaliu took as examples Croatia, Albania and Montenegro, Kosovo's neighboring countries, explaining how changes in fiscal policies have resulted in billions of dollars in investments occurring in these countries.
He emphasized how the changes on taxation policy will encourage foreign investment, and with its natural resources, labor potential and European standardized laws, Kosovo will experience an economic boost.
Hasan Abazi, the deputy chairman of Union of Independent Labor Syndicates of Kosovo, said that "changes in the taxation system are good work and I hope that it will lure foreign investment in Kosovo."
New Kosova Report