TIRANA, March 2 – As Albania is implementing the U.S. and EU’s-backed judiciary reform, the country’s Prime Minister, Edi Rama used the Socialist Party’s (SP) congress on Friday to announce a capital amnesty for all Albanians, excluding criminals, politicians, judges and prosecutors.
“We will have a general amnesty for all Albanians here and abroad the country for a limited time to declare all the assets in the banks… Those who didn’t make their money from drugs, terrorism, prostitution and criminal activity included in the special law, can be part of the amnesty. Those who are judges, politicians, prosecutors and officials obliged to declare their assets are excluded (from the amnesty), including me first”, Rama, who is also the leader of the ruling Socialist Party said.
Capital amnesty is a procedure whereby the state recognizes the rights to property (including money, real estate and certain other assets) withdrawn from the lawful economic turnover with the purpose of concealment of income and/or property where the right to the property was not duly formalized/documented or property that was formalized/documented to an “improper person”.
With this initiative, Albanian passport holders can legalize undeclared property received or owned and related tax liabilities associated with formation/acquisition and usage of such property. The Minister of Finance and Economy Anila Denaj told media on Monday that the draft law on capital amnesty is expected soon.
Other countries’ legislation on the matter is being examined by the Albanian officials, who will make sure the new draft law is in accordance with international standards.
“This initiative aims to complement another aspect towards the formalization of the economy, which has already begun with the fiscal reforms. This is a process that has not started yet, has been discussed with our expert groups for some time and will be given as a proposal to the groups of interest very soon. The details will be part of the discussion as the first draft is published”, Denaj said.
The legalization of the Albanians’ wealth is indeed a policy implemented by the Democratic Party (DP) government led by Sali Berisha in 2011. But then, as the opposition leader, Rama strongly opposed it.
Berisha invited Rama to vote on the capital amnesty, but he refused.
DP’s government couldn’t pass the law in the parliament, but Berisha authorized the Ministry of Finance to go on with the amnesty.
Under the 2011’s directive, all individuals in the country and abroad, large and small businesses, had the possibility to declare their cash in the banks and do the same with their undeclared real estate. The cash would be handed over to the bank after completing a form and paying 3 percent of the amount, as a tax. Once the money was deposited in the banks they could freely be transferred abroad.
After announcing the capital amnesty PM Rama also explained the reasons why he was against Berisha’s amnesty in 2011:
“The amnesty at that time was curtailed, it was not complete, and we opposed this amnesty because at that time there was no real will to fight crime and there was no red line between wealth from criminal activity and wealth from working”, Rama said.
The capital amnesty comes as Albania is implementing the justice reform and the vetting process of judges and prosecutors. PM Edi Rama announced in January the Operation Force of Law (OFL), a special operation against criminals. With law enforcement agents trained for over six months, the unit on assets of those accused or sentenced on organized crime charges.
Finance analyst Pano Soko says this amnesty will bring more revenue to the economy but will bring inequality among those who have regularly paid any dues so far and those who have not.
“Mathematically, this will bring in a cash flow, which will be deposited in the banks. Of course, that money will be invested and used. They will bring something to the economy. The problem here is political, or rather the problem is democratic, as equality among the citizens is undermined. We’ve just told all those people who paid taxes that you’re stupid”, says Soko.
