Import references fixed by the Albanian fiscal administration, higher than international market prices
Reference prices used by the Albanian fiscal administration reduce potential structural development and make the Albanian economy non-competitive. The reference prices are a heavy burden and a threat to the existence of many companies and compromise chances for the development of exports. Thus were the results of a survey conducted by Konfindustria, one of the most powerful trade and craft associations of Albania.
The survey was conducted over three months and collected continuous information from local industries. Its main finding is that the reference prices fixed by the Albanian fiscal administration for taxation quotes and tax-collecting purposes have gone astray, trading prices found in the international markets (Standard, 25.10.2009). Based upon these findings, Konfindustria has expressed concern over the implementation and application of the system of tax and customs reference prices and has asked the government to make its own references compatible with international market prices.
The scissor effect
On one side, Konfindustria observes a considerable increase concerning customs references for raw material imported to be treated or finished in Albania. On the other side, reference prices for the products realized in Albania out of these raw materials have remained unchanged and figure in at low levels compared to international prices. While this scissor effect has the virtue of being at all occasions favorable to tax-collecting policies, it may severely damage business spirit and business growth in many industries. And if Albanian businesses will suffer the consequences of these policies on a large scale, the tax-collecting policies will ultimately find fewer and fewer business subjects from whom they will be able to collect tax revenues.
Damaged competitive abilities
Not only are reference prices used by the Albanian fiscal administration unrealistic vis-ஶis international market prices, but they also exert a compressive tax burden in an unwelcome context.
Narrowing differences in values (scissor effect) between raw materials and finished products has put Albanian local production and industries in serious difficulties and has lowered to an unacceptable degree the competitiveness of products produced in Albania compared to foreign-produced products, reports Standard.
The Albanian industries that have mostly been damaged are reported to be the mechanical industry, the meat production and by-products, aluminum production industry, non-alcoholic drinks production industries, beer production and other industries. Konfindustria will soon forward to the Ministry of Finances and to the General Directory of the Customs separate propositions for each of the industries.
Competitiveness of vital importance to the Albanian economy
Competitiveness is one of the most neglected aspects in the Albanian economy. Even 20 years after the rupture of economical and political isolation, the Albanian economy is still unaware or lagging behind other regional economies regarding competitiveness. But as the country imports much more than it exports, the unbalanced need for foreign currencies creates a permanent pressure for the devaluation of the national currency, the Albanian Lek. Some analysts make a link between the exchange rate risks and competitiveness and call for more competitive-aware policies.
“The government should aim for the increase of competitiveness of the Albanian economy. In other words the goal is to export more and in this way to introduce more Euros in the country”, writes Kino Buxheli in his opinion titled “Lek and the concern of the Governor [of the Bank of Albania]” (Gazeta Shqiptare, 20.10.2009).
And the reference prices system used by the Albanian fiscal administration has a leading role in improving competitiveness.
