According to the document, more than 34.1% of the Albanian economy is
informal. This makes millions of USD, whch should go in the government’s
budget, stay unfairly in the pockets of private operators.
The state’s budget loses 680 million USD each year from uncollected taxes. This figure has come out from a World Bank document, which analyzes the tax system in 61 countries of the world for 2000-2010.
The report prepared by two experts at the economic management department of the Bank notes that the tax gap in Albania, the difference between the revenues that should be collected from the taxes, compared to what is really collected, is 4.87% of the Gross Domestic Product, if the informal economy is taken into account.
This classifies Albania as a country with a weak efficiency in collecting taxes, which, according to the report, has been deteriorated especially after 2008, increasing the tax gap.
But where go the taxes that we lose? Some of them disappear through intentional tax evasion.
Besides evasion, another part is lost when businesses or individuals exploit the legal gaps to reduce the tax burden.
The third reason that creates losses in the state budget, is connected directly with the weak extension of fiscal services to inform tax payers on the obligations that they should pay. These are the three main reasons of the tax gap, and the three of them are caused by the weak fiscal administration and tax policies.
The report says that Albania has enough space to increase the revenues through efficient tax policies and reforming the fiscal administration. The profits would be 680 million Usd, 20% of the total revenues that the budget collects, and more than the fiscal deficit of a normal year.
The collection of these taxes would make it easier for the budget and would enable increased funds for vital sectors such as education and health, in which Albania has been investing for years.
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