TIRANA, Dec. 5 – Damage to the state budget in 2016 almost doubled to about 110 billion lek (€820), which is about a quarter of what the Albanian government collected in annual income, a Supreme State Audit report has shown.
In a report monitoring the implementation of the 2016 budget, the public finances watchdog says a considerable amount of the damage incurred to the state budget was a result of abuses with the much-rumored concessions and a sharp hike in accumulated debt private companies owe to the tax administration.
The report, which is being examined by Parliament, shows damage to the state budget as a result of concessions of public property and their misadministration was at about 13 billion lek (€98 million) in 2016.
The overwhelming majority of abuses were identified in state-run Albpetrol oil company with about 9 billion lek (€66.6 mln) in missing income as a result of implementation of concession contracts with oil companies in violation of legal provisions.
The Supreme State Audit says oil companies operating in the country are actively engaged in practices of reporting high expenditure in order to avoid paying the corporate income tax which in case of oil companies is paid at a 50 percent only after investment costs are met.
With oil prices at an almost historic low of about $30 a barrel in 2016, Bankers Petroleum drilled no new wells in 2016, but the operation was not accompanied by a decrease in expenditure, auditors say.
Bankers Petroleum, which in late 2016 was acquired by a Chinese company after more than a decade of operations as a Canadian-run company, is the country’s largest oil producer accounting for 95 percent of domestic production at Patos-Marinza, one of Europe’s largest onshore oil fields.
In a key arbitration case, the Albanian government is seeking to settle a $57 million tax dispute with the now China-owned Bankers Petroleum, the country’s largest oil producer, dating back to 2011 when the company was run by the Canadians.
The Supreme State Audit also unveils the debt that private companies owe to the tax administration rose to about 51 billion lek (€383 million) in 2016, more than double compared to a year ago as the number of debtor companies increased by about 64,700 to 121,500, almost three-quarters of the total active enterprises. The overwhelming majority of debt is owed by big oil and state-run electricity operators but also gambling companies.
By contrast, the Albanian government owed private companies about 2.3 billion lek (€17 million) at the end of 2016 in new arrears.
