TIRANA, April 26 – Abuses by central and local government institutions are estimated to have cost Albanian taxpayers a record more than 1 billion euros or 10 percent of the country’s GDP in the past three years, according to a 2015 annual report by the Supreme State Audit.
The uncovered abuses which are ten times higher compared to previous years are mainly a result of abuses in the energy sector, in particular a €95 million out-of-court deal with the Czech company to end arbitration proceedings.
In mid-2014, the Albanian government agreed to pay CEZ in annual installments in the next four years a total of €95 million, an amount slightly lower to its initial investment in the Albanian distribution system, but half of the €200 million CEZ had warned it would claim in international arbitration proceedings. The Supreme State Audit, which filed criminal charges against the energy minister and the general state advocate, said the deal cost the state budget €479 million, including €95 million the government agreed to pay in compensation for CEZ’s revoked licence, some €352 million that CEZ’s unit in Albania owed to KESH power corporation in electricity purchases and OST transmission operator in transmission fees and some €95 million in irrecoverable damage because of the recognition of undocumented obligations, said the Supreme Audit. The energy ministry described the report as legally unfounded and politically motivated.
The state audit says the overwhelming majority of 84 percent of abuses were uncovered in the energy and oil exploration and production sector. Auditors say the Albanian government would have benefited $305 million in corporate income tax until the end of 2014 if oil production companies and the national agency for natural resources had not made unreasonable changes to the companies’ development plans and budgets.
The watchdog says the intentional changes in oil development plans affected government revenue from profit tax, which under Albanian law, companies operating in the oil industry pay at a 50 percent rate only after meeting their investment costs.
The state audit identified some 16.6 billion lek(€118.5 mln) in abuses in the tax and customs administrations accounting for 13 percent of the total damage in 2015.
A considerable 2.6 billion lek (€18.5 mln) in abuses was identified in the public procurement sector.
The Supreme State Audit filed criminal charges against 159 people in 2015 for alleged abuses of 86 billion lek (€614 mln) and issued 276 disciplinary measures against public administration officials. The State Audit complains only about half of its recommended disciplinary and administrative measures are implemented especially when it comes to fines or dismissals.
