Fiscal Justice and Tax Governance in Albania: Evaluating the New Fiscal Package for Free Professions and Small Businesses

The digital transformation of tax administration has intensified debates regarding the relationship between effective tax enforcement, taxpayer rights and institutional legitimacy. Within this context, Albania has proposed a new fiscal package introducing significant amendments to taxpayer classification, administrative sanctions, cash-holding restrictions and tax control mechanisms.

This study evaluates the proposed reforms through the theoretical perspectives of fiscal justice, tax neutrality, proportionality and risk-based tax administration. Adopting a qualitative research design based on legal analysis, comparative assessment and policy evaluation, the paper examines four key dimensions of the reform: the treatment of professional activities, restrictions on business cash holdings, the proportionality of administrative sanctions and the interaction between fiscalization and traditional enforcement mechanisms.

The findings indicate that while the proposed measures pursue legitimate objectives related to compliance enhancement and fiscal oversight, several provisions may generate tensions between enforcement objectives and established principles of effective tax governance. In particular, the proposed classification of professional activities may affect tax neutrality, while cash-holding restrictions and certain administrative sanctions may increase compliance burdens and raise proportionality concerns. Furthermore, the effectiveness of expanded tax controls depends largely on their integration with fiscalization and risk-based compliance management systems.

The study concludes that sustainable tax administration reform requires a balanced approach that combines effective enforcement with fiscal fairness, legal certainty and taxpayer trust. The Albanian case demonstrates that the long-term success of tax reform depends not only on strengthening compliance and reducing informality but also on preserving neutrality, proportionality and administrative legitimacy within an increasingly digitalized fiscal environment.