Progresive Tax Vs Flat Tax and Its Effects on the Foreing Direct Investments in Albania

Abstract

The inspired for the treatment of this topic is the debate regarding the effect of the two tax systems, flat and the proportional one that has been adopted in our country last two years. The impact of taxes is not only important in the economic side but they have their influence and in social side. The major competition between the countries and the compaction to attract foreign direct investments is the tax system itself with major economic and competition among countries to attract foreign direct investment is itself the country's tax system. The most important factors affecting the state budget income, are income tax and personal income tax business. The goal this study is to analyze the effects that the change on the tax system has had on the impact on the income tax rates in Albania. For this reason will be analyzed the effects of income tax on inflows of foreign direct investment, creating a clearer idea of how these two models are been adapted into a taxation economic situation in Albania during their application. Studying and deal with the experience of both, tax systems will be understood the importance of change that has a country's tax system on foreign direct investment. The research question raised in this study is: how and if the changes in the tax system, has impacted foreign direct investment? Methodology: Literature review of the tax systems, analysis of the factors influencing the tax income and a linear singular regression through the empirical measurement

DOI: 10.5901/ajis.2016.v5n3p79