Analysis of VAT and Direct Tax Burden in Western Balkans

• Tax systems in Western Balkans rely heavily on VAT and taxes on work
• VAT payments account for 36% of tax burden in BP6 countries
• Kosovo has highest VAT burden at 52%, while North Macedonia and Serbia have lowest at 28%
• Direct taxes, including capital tax and tax on labor income, make up 16% of tax burden in BP6
• Albania has highest direct tax burden at 20.5% of GDP, mainly from profit tax
• Serbia follows with 18.6% of GDP in direct taxes, mainly from personal income tax
• Kosovo, North Macedonia, Montenegro, and BiH have varying levels of direct tax burden
• High VAT burden impacts economy by increasing prices for citizens and businesses
• Tax policy and administration have not shifted burden from consumption to labor and capital.

Source: altax.al

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

---

---