TIRANA, Oct. 6 – The Albanian government has proposed some legal changes to the functioning of the Tax Appeals Directorates, whose operation since 2008 has been biased against the business community considering that more than 90 percent of its decisions were in favour of tax authorities, paving the way to the settling of dispute in prolonged court cases.
In its newly proposed changes to the tax procedures, the Tax Appeals Directorate, a structure currently functioning within the general tax directorate, will shift starting 2017 as an independent structure within the finance ministry with a nine-member board which is also expected to include representatives from the business community.
Last year, the Tax Appeals Directorate examined 7,540 complaints by businesses worth 16.3 billion lek (€117 mln), but upheld the overwhelming majority of 94 percent of cases worth 15.4 billion lek (€110.5 mln).
All 94 percent of complaints were appealed to administrative court with 50 percent of them cancelled under a final court ruling, the government says.
Currently, the Tax Appeals Directorate lacks business confidence as an independent institution considering that its director is appointed by the finance minister while the inspectors of this directorate are part of the general tax directorate.
In case the Tax Appeals Directorate rules in favour of businesses, the decision will be binding and the tax authorities will no longer be eligible to appeal the decision, putting an end to prolonged administrative court examinations, says a report explaining legal changes.
More than two years after their establishment, administrative courts are failing to examine business appeals in time and about three-quarters of their decisions are in favour of the public administration, according to a report the Albanian Investment Council, a new platform set up in 2015 with the EBRD support to intensify the dialogue between the government and the private sector.
“Administrative courts do not possess capacities to objectively review cases within legal deadlines, taking into account the high number of cases filed in such courts and the limited number of judges,” says the report about disputes the business community has with the public administration.
A total of about 12,000 cases is the backlog in the Administrative Court of Appeals alone, pending adjudication by 7 judges. Delays result from the broad object of administrative disputes that are adjudicated in these courts, where about 50 percent of the administrative cases are not directly linked to the business, the report shows.
Data indicates that more than 75 percent of the total number of administrative appeals from the businesses filed to the administrative courts, pertain to taxes, customs, inspections and public procurement.
Delays in court decisions and the independency of the Albanian judiciary is one of the main concerns for the Albanian and foreign business community.
Albanian MPs have recently unanimously approved a long-awaited justice reform that is expected to transform the country’s highly perceived corrupt judiciary.
