TIRANA, Oct. 22 – Economy experts say the increase in penalties against businesses as part of the nationwide campaign against informality is having an adverse effect because of the tension between the business community and tax and customs administrations.
Arben Malaj, a former finance minister and economy expert, says the atmosphere of increasing penalties in the fiscal administration law and the Criminal Code runs counter to what the Albanian economy needs.
“Albania needs to have stronger economic growth in order to easily collect more taxes. The forced collection of taxes could temporarily reduce the deficit and public debt stocks, but could kill economic growth in the mid and long-run,” says Malaj.
Zef Preà§i, the director of the Albanian Center for Economic Research, says the government revenue data reflect both the poor performance of the Albanian economy but also the tense climate between the government and the business community because of the campaign against informality. According to him, the government should focus on improving the business climate, quit arbitrariness on punishment by fines and imprisonment toward the business community and return to dialogue and cooperation to make a gradual reduction of informality.
Selami Xhepa, another economy expert, says government’s expectations on tax revenue have been overoptimistic and punishment for businesses has brought a decline in investments and employment. “The government should have a friendlier attitude to businesses especially small businesses because this is the only way that could lead to the formalization of the economy,” he told local media.
Last September, some 600 groups of tax inspectors backed by police officers started carrying out field inspections in a bid to give an end to widespread informality, estimated at around 30 percent of the country’s GDP, officials said.
The Albanian government says it targets collecting about 330 million dollars from the nationwide campaign which will last 300 days in a similar operation to the electricity campaign to curb massive thefts and collect accumulated unpaid bills which has brought an extra 100 million euros to the state coffers since its launch in late 2014.
