SEEU Review vol. 6 Nr. 2 (pdf) - South East European University

Haderi S., Prof. Dr.; Kola T., Prof. Asocc. Dr.; Liko E., Dr.Table 3: Indicators related to CIT performance in AlbaniaYear 2003 2004 2005 2006 2007 2008CIT to GDP ratio 1.9 2.1 3.2 2.5 2.2 1.7Corporate income taxrevenue productivity0.095 0.105 0.115 0.125 0.11 0.17Normalized tax yield 3.031 3.297 4.764 3.671 3.123 4.615Normalized tax yieldEU-152.95 3.03 3.21 3.37 3.46 N/ASource: Author CalculationFrom the above reported data could be said that after a decrease ofstatutory corporate tax rate in Albania there is a considerable decrease ofratio total revenue generated from this tax relative to GDP.The corporate income tax revenue productivity, even though have had aslight increase in time has very low values, which means that in Albania thistax is not performing well in terms of producing revenues, given theprevailing tax rate.The normalized tax yield in Albania compare with that of EU -15 fromthe same time period, reveals that the tax yield would have been higher inAlbania if the statutory rate were the same as in EU-15 countries. From thereported date could be said that there is not a big difference between Albaniaand EU-15 normalized tax yield.Econometric Analyzes and ResultsThe impact of tax competitiveness could be analyzed indirectly bylooking for the responsiveness of foreign investment to corporate rate. Theestimated regression has the form:144= + + + +Dependent variable log (FDI). Independent variable: statutory corporatetax rate (TAX), X is a vector of macroeconomic control variables thatinclude GDP per capita in common currency, labor cost measured byaverage wage, openness to foreign trade, and EBRD transition index that