TIRANA, Nov. 11 – Ombudsman Igli Totozani has described the new amendments to the Criminal Code which tighten measures against tax evasion by replacing some penalties by fines with punishment by imprisonment as hurried and premature and with a serious impact on the country’s poor and vulnerable groups.
In a letter to the legal affairs parliamentary committee, Ombudsman Totozani said such penalties would prove fatal for people with low income.
The parliamentary legal committee has already approved the amendments to the Criminal Code, which have also been strongly opposed by the business community and the opposition Democratic Party as repressive. The amendments, which need a qualified majority of 84 votes in the 140-seat Parliaments have also been opposed by the key allies of the ruling Socialist Party, the Socialist Movement for Integration and the Party for Justice, Integration and Unity whose votes are vital to turn the bill into law.
Commenting on an amendment which envisages up to three years in prison for failure to register with tax authorities and issue tax receipts, the Ombudsman says he strongly supports the government’s nationwide campaign against informality, “but making this a criminal offence considering the vulnerable groups it affects is an initiative which must be accompanied by other measures and policies, otherwise it would be hurried and premature.”
“That is because in our view the government should not only focus on tightening its criminal policy, but also identify and implement social policies, otherwise severe economic circumstances can affect certain categories of individuals and at the same time fuel social issues,” he says.
Two months after the launch of the nationwide campaign against informality, the Ombudsman’s office says that “it is a fact that a high number of individuals, mainly poor ones, find themselves with no income and job which they previously secured through modest commercial activities.”
The People’s Advocate says adoption of the new amendments would result in a higher number of poor and vulnerable people in prison which are already overcrowded at 27 percent above their capacity.
The Ombudsman suggests the government should focus more on the social aspect such as opening of new jobs and economic growth as a considerable number of those affected by the campaign were people in need with no social assistance.
The ruling Socialist Party-led coalition has proposed some harsh amendments to the Criminal Code removing fines on smuggling and informality and envisaging only imprisonment of up to ten years for imports, exports and transit of illegal goods. The draft law has also sparked fierce reaction by business representatives who describe the new measures as aggressive and not helping improve the business climate in this time of crisis when businesses are facing poor demand and rising costs due to higher taxes.
“Carrying out illegal commercial activity or conducting commercial activity not registered with tax authorities, failure to declare employees and issue fiscal receipt is a criminal offence and is punishable by up to three years in prison,” says the new article 180/a proposed as an amendment to the Code.
With a nationwide campaign to curb informality already underway, the ruling Socialist Party-led majority has recently approved in parliament some changes to the tax procedures law, which increase penalties on tax evasion up to 50-fold. The business community has also expressed concern over the high level of fines which are in huge disproportion to their income or the offence committed.
The new changes envisage fines of up to 10 million lek (€71,000) on big businesses operating in the wholesale trade for not issuing tax receipts, compared to 200,000 lek (€1,411) currently. Fines on small businesses are also envisaged to increase 10-fold from 50,000 lek (€353) to 500,000 lek (€3,529) starting Nov. 12.
