Public finances register significant recovery in 2014

The corporate income tax which in January 2014 was raised by 5 percent to 15 percent rose by a sharp 42 percent, having a major contribution in the recovery of public finances.
TIRANA, Dec. 23 – Public finances registered a significant recovery in 2014 when they returned to double-digit growth rates overcoming the slight negative growth rates in 2012 and 2013.
However, the tight fiscal policy government has been following this year has resulted in a sharp contraction in public investments.
Finance Ministry data shows total government revenue in the first 11 months of this year rose to 329 billion lek (Euro 2.3 billion), up 12.6 percent compared to the same period in 2013.
VAT and the corporate income tax had the main contribution in the recovery of public finances.
VAT, which is levied at a fixed 20 percent rate on almost all goods and services and accounts for more than one third of total government revenue, rose by 14 percent in the first eleven months of 2014.
Excise taxes, the second most important source of revenue, also registered a 16 percent increase in the first eleven months of this year. The corporate income tax which in January 2014 was raised by 5 percent to 15 percent rose by a sharp 42 percent.
Fuelled by a low level of public investments, the budget deficit in January- November 2014 dropped by 32 percent to 41 billion lek (around 290 million euros).
Public investments in the first eleven months of this year hit a seven-year low of 43.5 billion lek (Euro 305 million) down 16 percent compared to the target government had set for this period and down by 24 percent compared to the same period in 2013.
Finance Minister Shkelqim Cani said he is optimistic the annual public investment target will be fulfilled in December 2013 when government plans to accelerate payments for public works.
Government revenue registered slight declines of 0.5 percent in 2013 and 0.03 percent in 2012 on sluggish consumption and private investments.