TIRANA, Sept. 29 – The International Monetary Fund has warned smuggling and tax evasion are affecting government revenues which are failing to meet the target even after the mid-year budget cut. The warning is given by Jens Reinke, the IMF resident representative in Tirana in an interview for Monitor magazine.
Asked about the reasons of underperforming revenue, Reinke said external factors such as lower fuel prices and interest rates have played an important role but “there is some evidence that smuggling and tax evasion have an impact especially on income collected from the value added tax and excise taxes.”
The IMF representative says cooperation between tax collection agencies and the finance ministry has not been very efficient and that some avoidable mistakes were made in the revenue forecast.
Asked about the nationwide campaign against informality, Reinke said the IMF supports government’s efforts to fight tax evasion and expand the taxpayer basis but advises following the best principles and practices.
“Tax evasion and a narrow taxpayer basis result in lower income. The government is already actively addressing tax evasion. We advise the government in parallel to stop approving new tax exemptions and lift existing ones. We also see a lot of space in improving the quality of public spending, including investments,” he said.
The poor tax performance in the first half of this electoral year forced the Albanian government to revise downward its overoptimistic 2015 budget while the International Monetary Fund has postponed its new loan tranche as part of a three-year Euro 331 million loan deal.
