TIRANA, Sept.2 – The law that obliges businesses to perform all their expense transactions through banking channels became active September 1 and is part of the fiscal package approved in June of this year. The administration wanted the law to be active since July 1, but considering opposition from business, it granted a grace period till this month. Different business groups at the time opposed the decision, mentioning the limited capacities of the banking sector in Albania, and most importantly, their increased costs given the commissions applied by banks for every transaction.
In their letter to the administration, a group of industry representatives said that the governmental initiative to oblige business to carry out at least 90 percent of their expense transactions, could cause some of them to go bankrupt. Businesses were not happy with the short time given until September either, asking for a new date in December 2008.
The decision is seen as ironic to most businesses as the government itself has not completed the phase of transferring all budget salaries to the banking sector. In rural areas, government employees still receive their salaries in cash and this has raised questions about the territorial access to banks in Albania which are not present in villages.
Business reaction
Businesses have opposed the decision based upon several considerations. The companies that work with raw material that are imported and reprocess it for export have explained that such an initiative implies a very high cost for the companies given bank transaction rates. The cost of production hence immediately increases and is reflected in prices. This, in turn, decreases the competitiveness of their products, which is crucial to the survival of these sites. Foreign companies can choose to outsource this branch of their operation to the country where the cost remains lower, causing the unemployment of hundreds of Albanians.
