Jens Reinke, representative of the IMF in Tirana, says that IMF was expecting lower revenues, but not at this level.
“The revenues were disappointing. It was a surprise. We knew some factors had negative effects, including the lower oil prices that affects excise, the VAT and honorary tax. Also the lower import of cigarettes. But the low inflation also had a role in this result. These factors do not explain the reduced revenues, which is higher than these effects”, Reinke declared.
Preliminary data show that the revenues have not been realized even for April. The IMF says that it is important to understand at this point what are the causes of this tendency.
“It is still early to give conclusions, but maybe we should remind that las tyear the government excluded from taxes a series of sectors. Although these exclusions might seem small and without a budget impact, they have started undermining the tax ystem. We want to discuss with the government how we can treat these exclusions in the future”, Reinke explained.
Top Channel: Will this put in risk the budget, and what solution proposes the IMF?
Jens Reinke: I can say that the spending is lower than the plan. We don’t have a risk that a dramatic growth of the defict. The target of the deficit might be reached. But failure to realize the revenues is not the best result to do this. We have seen that Albania has a weak tax efficiency even if compared with the countries of the region. Our main focus would be to improve the tax collection and increase the efficiency.
As for the economy, the IMF values that the recovery is still going on, although with a lower pace.
“The economy is recovering, although with a slower pace than predicted. Next month we will have another mission which will make a full review of macro. There might be a slight reduction of the economic growth prediction, but we are still optimistic”.
The Board of Directors of the IMF approved a periodic review for the agreement with Albania, giving this way another loan for the government.
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