TIRANA, October.8 – The Albanian tax authorities have prepared a list of prices which will be finalized in 2008. 4000 items will have determined prices for these offices, while 1000 of them are finalized. These prices will be used in the evaluation schemes and in the alternative evaluation procedures that taxation authorities will perform on businesses to determine their tax obligations. A new structure has been created, the Market Prices Investigation Directory, which is a unit specialized in investigating the 400 main articles sold in wholesale and retail markets of the food industry. This will help the halt of the frenetic inflation that is currently hitting consumers. Fiscal evasion will also be avoided by this measure. According to the General Directory of Taxation, the largest amount of fiscal evasion is done through incorrect reporting of prices by businesses.
This project has been opposed by all business groups. The Construction Association, Konfindustria and the Chamber of Commerce are against this proposed law, explaining that it is absurd when the market is dynamic and prices change frequently given shifts in demand and supply. On the other hand, the Ministry says it will not retract the law but, on the contrary, make it a priority for next year.
Opposition from Construction Association
“Preparing such an outdated manual is a step back in time, overdone centralization and senseless, arbitrary behaviors on the side of the administration. This can work only in planned economies where all the costs are fixed by the centralizing party: prices, norms for exhaustion, work efficiency, labor costs, technology, etc. in the market economy, the scale of mechanization changes rapidly and constantly and varies from one company to the other. Raw materials are also different in kind and costs, as is the labor. In conditions of perpetual changing dynamics it is absurd to draft a manual like this and insist on implementing it to control all private activity.”
KonfIndustria
Objections have also been raised by one of the largest producer associations in the country, Konfindustria. According to their representatives, such methodology is bound to fail and is also dangerous for entrepreneurs. The arguments of dynamic prices and changing costs were repeated by this association as well.
Another concern expressed by the business community has been the alternative evaluation process which will endow tax authorities with the potential to abuse their subjects. This particular part of the project has also been opposed by the Chamber of Commerce.
