TIRANA, Oct.3 – In an interview with the VOA, Finance Minister Bode said that the primary feature of the estimated economic budget of 2008 will be a historical tax decrease for business in Albania. The profit tax will be halved; a measure that will leave no less than $120 million to businesses to reinvest in their activities. The sum will be deducted from the state budget. A series of administrative steps will then be taken in order for the deficit not to influence the major infrastructure and other public projects that have begun in Albania . The state budget, complemented with loans approved by the IMF, will finance $800 million worth of public investments next year, according to the Finance Minister.
Road infrastructure will continue to use the majority of this money, with the controversial Durres-Kukes road taking a large share of the budget. The minister mentioned other road projects, especially along the coast, which aim to promote economic activities and tourism. He said the strategy of the government to separate the road projects and allocate different segments to different contracted firms was done due to the limited capacities of Albanian firms.
Asked about the recent controversies of the administration and especially the sector that he leads and the business community, Bode explained that the only businesses left unsatisfied with the new initiatives are those which have problems with informality. “Regular lawful businesses who have always complied with regulations are just happy to pay half of what they paid before,” Bode said.
Vice Minister declares even more public investments and wage increase
No less than 1 billion euro, or 12 percent of the GDP, will go for public investments in 2008, according to Finance Vice Minister Sherefedin Shehu. This IS an increase of some 40 percent compared to 2007. Bechtel, which has the contract for the Durres-Kukes road, will receive 270 million euro, out of which 230 have been already taken out as loans from two Greek banks: NGB and Alpha. Investments financed by foreign sources for next year are estimated at 500 million euro.
The draft budget for 2008 will be approved by the government on October 15 and will then be presented to the Parliament. The problem with investments has traditionally been implementation with this year’s indicator less than 50 percent, despite being in the tenth month of the year. Minister Bode said that after this month, no more funds for projects will be disbursed. According to the experts the problem is related to the limited capacities of firms that take over the projects. According to Shehu, the money that has not been used from this year’s allocations will be used in the land compensation schemes.
News given by Shehu is that next year budgeted salaries for education and health sectors will increase. “The measure is predicted for July and is around a 15 percent increase,” Shehu said.
