TIRANA, Feb. 17 – The Supreme State Audit says it has uncovered 11.5 billion lek (€82 million) in damage to the state budget in alleged tax evasion by oil concessionaires in the country.
In its latest report, the watchdog says the Albanian government lost about €82 million in the past three years from failing to properly monitor oil exploration and production concession agreements it has signed with several foreign companies.
The audit unveiled that concessionaires evaded the overwhelming majority of 11 billion lek (about €80 million) by using adulterated fuels and not declaring the extra production.
The practice is also widely used even in retail fuel stations where certified fuel is mixed with non-standard products to increase the volume at the expense of consumers and to avoid paying taxes.
Audits which mainly cover the 2013-2015 activity also unveiled oil concessionaires evaded 316 million lek (€2.2 million) in value added tax payments by declaring subcontracted works and services as oil operations.
The watchdog says the intentional change in oil development plans is also affecting government revenue from profit tax, which under Albanian law, companies operating in the oil industry pay at a 50 percent rate only after meeting their investment costs.
Both the oil and mining industry in the country have been severely affected by a sharp decline in international commodity prices, affecting production, investments and employment.
With international oil prices at a 12-year low, the country’s largest oil producer, Canada-based Bankers Petroleum, says it has delayed its drilling activity and opted to resume as soon as pricing improves.
However, several international oil companies, including the Royal Dutch Shell and Israeli’s Delek Group, are showing increased interest in Albania’s free oil blocks considering the country’s huge reserves and prospects of a rise in commodity prices.
