Social security contributions and the informal economy

TIRANE, Oct. 19 – Evelina Koldashi, director of the Social Security Institute of Albania (SSIA), said that lowering the required social security contribution from the employer side by 30% would help the fight against informal economy.
That measure would reduce the total cost to the employers causing in turn an increase in the general employment level. Koldashi predicted that the lower cost would urge businesses that have not insured their employees yet to approach the social security program normalizing their activity and legally registering their employees. The SSIA expects the increase in private contributions by 25 percent. It expects to have 39 billion leks in 2007. That will be used to afford higher pensions and to realize the doubling of the lowest pensions. The reduction measure will be added with other administrative and legal changes in order to provide a better framework to fight fiscal evasion.The SSIA will collaborate intensively with the General Directory of Taxation to accomplish its goal, she said.