IMF has urged Albanian gov’t to increase some taxes: Why and which?

In the first post-monitoring report, the International Monetary Fund recommended to the Albanian government to apply a set of new taxes, which are expected to be translated into an additional € 86 million annual cost for Albanians.

New taxes include that of small business, tax on all salary levels, including the minimal one, indexation of national taxes based on the inflation rate, and so on.

This recommendation has become relevant not only by the slowdown in fiscal consolidation but also by the fact that Albania is the country with the lowest share of government primary incomes and expenditures in relation to Gross Domestic Product in the region.

The graph best illustrates this and shows that government revenues and primary expenditures in relation to Gross Domestic Product during 2008-2016 were fixed at 26%, i.e. about one quarter, while in other countries in central and southeastern Europe this rate climbs over 30% and to about 40% for the greatest part.

This means that the level of revenue collection is not at all satisfactory.

This has been a longstanding problem of Albanian governments over the years, and efforts have been made to increase revenues by improving their collection rather than raising them.

But it seems that these spaces are already running out of thin air.

SCAN

*Material i përgatitur nga portali SCAN. Ripublikimi mund të bëhet vetëm kundrejt citimit të autorësisë dhe burimit origjinal.