TIRANA, June 7 – Albania has one of the region’s highest tax burden, but collects only about 27 percent of its GDP in tax and non-tax revenue, the second lowest amount among six EU aspirant Western Balkans countries.
The data indicates widespread informality in the Albanian economy, estimated at about 30 percent of the country’s GDP and the inefficiency of the country’s tax administration.
The 2016 total revenue as a share of the GDP in the six Western Balkans countries ranged from a 26.6 percent in Kosovo, to 27 percent in Albania, 32.1 percent in Macedonia, 42.3 percent in Bosnia and Herzegovina, 43.3 percent in Serbia and 45.1 percent in Montenegro, according to a European Commission report.
Despite a late 2015 nationwide campaign against informality, Albania’s total revenue during the past couple of years has increased by only 0.8 percent to 27 percent of the €11 billion GDP.
The 2.4 percent increase in total revenue between 2013 to 2015 is mostly attributed to a hike in the tax burden.
Since 2014, the corporate income tax and the withholding tax on dividends, rents and capital gains have increased by 5 percent to 15 percent, making the tax burden in Albania one of the region’s highest.
At 36.5 percent of profit, Albania’s total tax rate is slightly lower only compared to Serbia’s 39.7 percent in the region, according to the 2017 Doing Business report.
The total tax rate in other regional EU aspirant economies ranged from a record low of 13 percent in Macedonia, 15.2 percent in Kosovo, 22.2 percent in Montenegro, 22.6 percent in Bosnia and Herzegovina.
The low income the government collects also affects spending and especially much-needed public spending in key priority sectors.
Albania’s GDP of about Euro 11 billion is lower only compared to that of Serbia and Bosnia and Herzegovina among the six EU aspirant Western Balkans countries.
