TIRANA, Mar. 5- 2019 has started as a difficult year for the Albanian finances. Official data from the Finance Ministry show that as of January the budget revenue dropped by 2,5 percent comparing to 2018, or 900 million lek ($8 mln) less. The detailed statistics show that the main reason of this decline were the non-taxed revenues, but in parallel also the revenues accumulated from taxes with a slow progress.
According to the fiscal tables, the General Directorate of Taxation and the General Directorate of Customs accumulated 200 million lek ($1,79 mln) less this Jan. 2019, than the previous year. The most problematic areas were the excise, national taxes, and the VAT, even though the latter is linked to the significant increase on business reimbursements.
In Jan. 2019 the government returned 1,7 billion lek ($15,29 mln) worth of VAT to private enterprises, which comprises of a record turnover with an increase of 70 percent comparing to 2018. The International Monetary Fund and the World Bank warned that 2019 will be more challenging for the Albanian economy, due to a Eurozone slowdown.
The state budget seems to be experiencing the first pressures of this slowdown. The preliminary data actually suggest that the revenue progress on the budget has been also constrained in February, raising concerns that the government will be forced to cut public spendings, or buckle the VAT turnover to taxes.
The initial budget plan foresees that the government will reimburse 1,7 billion lek worth of VAT to private enterprises each month, settling thus the lagged debts. However, if the revenues will keep displaying a slow progress then it is likely that the arrears towards business won’t only not be liquidated, but might be further deepened.
