Interest rate set for late payments

TIRANA, April 8 – Failure to pay bills in time will cost government a monthly interest rate of 8 percent, according to a new draft law aimed at preventing the accumulation of new unpaid government bills which are estimated to have amounted to around 5 percent of the GDP.
Introducing the draft law at the parliamentary economy committee, Economic Development Minister Arben Ahmetaj said the approval of this law will improve rules on the transactions between government and businesses but also contractual obligations among private companies.
The new law is expected to make compensation on late payments easier as no legal process will be needed to determine the value of compensation.
The Finance Ministry has prepared a draft strategy which foresees the payment of a total of 72.6 billion lek (Euro 500 million) in government arrears over the next three years. The arrears, estimated at 5.3 percent of the GDP include unpaid bills to the business community for finished public works and services, VAT and profit tax refunds as well as bills from court decisions against the Albanian government, expropriations and payment of social assistance to people with disabilities.
Almost half of the arrears, some 35 billion lek (Euro 244 million), will be paid in 2014 while the remaining part some 20 billion lek (Euro 140 million) and 17.5 billion lek (Euro 122 million) will be paid in 2015 and 2016.