TIRANA, June 19- The Albanian Trade Union (ATU) has brought the undeclared economy back into focus as a dangerous component that drives policies in unrealistic planning and undermines all business activities in the country. After a study on this phenomenon in various sectors of the economy, ATU declared that little progress has been made in reducing the informality in our country.
This is also evidenced from studies made by international organizations which state that Albania has considerable levels of informality in the economy. This high rate reflects the country’s economic development model, where agriculture takes first place both with the highest degree of informality, but also as the largest employing sector.
According to an International Monetary Fund (IMF) report on informal economy in 158 countries, Albania ranked 54th in the world for the size of the informal economy in relation to GDP. The average size of the shadow economy in the 158 countries is 31.9 percent, while Albania has the gray economy above the world average.
Analogue to the IMF report is also a study by the World Bank on the progress of small and medium enterprises in the Balkans, which estimates that informality in Albania continues to remain high and accounts for up to 50 percent of the economy. The study says that although Albania has taken measures to reduce informality, the phenomenon remains a challenge for the tax administration. Informal businesses generally have lower productivity than formal businesses. The World Bank estimates that, although Albania has adopted a large variety of rules to monitor abuses, their implementation remains weak due to continued informality in the workforce.
ATU reports that a profound and long-term reform including all administrative structures, civil society, consumers and traders is needed to rid this informal economy. This reform should not only involve punitive measures, but also start as a natural awareness process for all citizens. Suggestions include introducing better competitiveness for the businesses that file the largest number of tax invoices, to offer provisions for businesses that facilitate the country’s fiscal burden by providing tax coupons, to raise awareness, train tax workers and the customs for the manner of communication with the interested parties, the manner of obtaining information etc.
Although actions to increase security and punish offenders and informal abusers have been taken in the food market, the challenges still remain. There is increased attention to the most extreme cases where fish sold on sidewalks, or on small and open pickups that turned into its stores. However, it seems that the law is respected only in the main urban areas, because in other towns ambulatory merchants still sell food products on the street.
There is still a good deal of merchants that act in almost complete informality. But it is concerning how the competent authorities sometimes allow violators and abusers to continue competing unfairly with all other legitimate and formal businesses that contribute to the functioning of the country by paying all taxes. If the government was sufficed only by imposing fines, then the citizens themselves should become more aware and demand that they are served with the optimal trading conditions of all types of products, demand the presence of seals from the food control agency, product certification, tax coupon, etc..
Another case are the second-hand clothing stores, which are among the most frequented in Tirana, driven by poverty and desire to dress in brands. Most of these businesses operate by putting their clothes on sidewalks to attract customers. A negotiation to prices is usually included to the final transaction, but the buyer does not receive a tax invoice, as these businesses generally operate in the black market.
