Govt assures opposition of cash register compensation

TIRANA, Nov. 15 – The Finance Ministry says all expenses for the reimbursement of new cash registers will be paid by central government, assuring opposition-led municipalities and communes that their local government revenues will not be affected by the process. The reaction came last week by Finance Minister Ridvan Bode following protests by the Association for Local Government Autonomy, representing some 100 big municipalities and communes led by the opposition Socialist Party, which complained that the new changes to the tax law would oblige them to compensate in taxes the installation of cash registers for small businesses, a process expected to conclude by the end of February 2011.
Speaking to reporters, Bode invited the opposition, whose leader Edi Rama is also the Tirana Mayor, to draft an amendment to the law guaranteeing that the cash registers will be compensated by central government revenues if they are not convinced by his ordinance which foresees exactly the same thing.
Bode assured the new measure to make the installation of cash registers compulsory for all small businesses would first of all be of benefit to municipalities and communes, which collect taxes from 85 percent of all businesses operating in Albania.
“The accurate measurement of their turnover will improve transparency on the market, lower corruption by municipal tax inspectors and considerably increase their revenues,” said Bode.
Denouncing poor performance by local government units (LGUs), whose biggest municipalities are run by opposition mayors, Bode said local government revenues in 2009 were the same to that of 2005. He said the total local government budgets during the past 5 years had increased only thanks to central government grants which have risen by 14 billion since 2005, taking LGUs budget to 33.6 billion lek at the end of 2009.
Under the 2011 draft budget, LGUs will benefit 35 billion lek from central government.
Accusing Tirana Municipality of mismanaging funds, minister Bode said the country’s biggest municipality was spending too much on wages and current expenses, and cutting investments.
Asked if government would intervene to avoid fund mismanagement in Tirana Municipality, Bode said that under the current law it is quite impossible to do this.
“What we will demand, is that grants destined to local government units will be conditioned by providing a series of public services and limit the use of central government grants for wages in the administration.”
Government says it will reimburse small business owners for the compulsory installation of cash registers, whose process was delayed following protests by traders over their high prices last October.
Under the recently approved draft law, traders can benefit up to 44,000 lek (around 440 dollars) in tax compensation for the tax registers whose final installation deadline has been postponed by next December.
“This decision was made in consultation with the companies which are authorized to implement the cash register process, by accepting to offer cash registers at reduced prices of 53,000 lek (VAT included) or 44,000 (VAT excluded),” said Bode earlier, adding that all businesses which have installed cash registers or signed contracts until February 28, 2011 will benefit tax compensation.
The Association for Local Government Autonomy had described the new changes to the local government tax law, as “an attack violating the Constitution and local government autonomy aimed at sending opposition-led municipalities and communes to bankruptcy and shifting the tax burden of the corruption with cash registers to local government units (LGUs).”
Starting from next year, VAT inclusion for small businesses will further drop to 2 million lek of annual turnover, down 5 million lek currently.