IMF Skeptical about Albania’s Fiscal Amnesty Reform

TIRANA, March 08 – The International Monetary Fund (IMF) is skeptical about the fiscal amnesty reform the Albanian government has undertaken, local media reported after a meeting held behind closed doors last Monday between an IMF mission headed by Gerwin Bell and members of the parliamentary Economy Committee.
The IMF is reported to have been in principle against the fiscal amnesty because of violating the competition principles and affecting tax evasion, suggesting that if the Albanian government is determined to implement the law, it should be careful with the number of beneficiaries.
Sherefedin Shehu, a deputy of the ruling Democratic Party and former deputy Finance Minister, told IMF chief Bell that the fiscal amnesty law would not forgive fines but legalize hidden assets. It was reported Bell was skeptical about the administration of the process by the fiscal administration and the role of the legal framework.
Meanwhile, opposition Socialist Party deputy Arben Malaj, a former Finance Minister, was also present in the meeting breaking the boycott of his party.
“My participation in this meeting is a grateful obligation to the effective cooperation we had with the IMF during the 8 years of the Socialist Party governance.”
Speaking of the fiscal amnesty, Malaj said he had addressed the issue with concern with the IMF representatives.
“The fiscal amnesty should not be seen by the government as a magic formula to formalize the economy or permanently increase revenues,” said Malaj, adding that the amnesty should be carried out in full consultation with the IMF and the EU in order to reduce risks and consequences of a spontaneous implementation.
Last January, Albania passed a law placing a 10 percent tax on any money that firms used to increase their capital, but had not previously declared.
“The law covers cases when owners, partners, shareholders increase the capital in their businesses. When this capital has not been earned through economic activities, then they will pay a 10 percent tax,” Finance Minister Ridvan Bode said earlier.
The law is also seen as a tool for government to collect money as the public finances have been hit by the crisis.