I like several passages from Steve Forbes’ latest column, but the most-fun part is when he extols the virtues of tax reform in Albania ? something that few writers other than Forbes would bother with:
Kosovo, with a predominantly ethnic Albanian Muslim population, has grabbed headlines by declaring independence. Skeptics wonder if the new state can make it economically. But there’s one Muslim country in the oft-tumultuous Balkans that’s already doing things right: Albania. During the past two years Albania’s government has enacted a number of exciting and eye-opening reforms.
On the economic front Prime Minister Sali Berisha proudly points to Albania’s now having the smallest government per capita in Europe. It has enacted a 10% flat tax on both personal incomes and business profits. This rate is lower than Albania’s previously low maximum rates of 23% on individual incomes and 25% on profits. Social security levies have been lowered by 31%. Tariffs with European countries have been eliminated. Government personnel has been cut by almost 30%, and the cost of procurement is down 20%. Total revenues have surged from 22% of GDP to 27%. Not surprisingly, the IMF strongly advised Albania against slashing tax rates. “So did many of our budget people,” chuckled Berisha. Such advice was profitably ignored.
