Some 600 groups of tax inspectors backed by police officers have started carrying out field inspections in a bid to give an end to widespread informality, estimated at around 30 percent of the country’s GDP, causing panic even among registered businesses over fear of heavy fines and seizure of goods.
The Albanian government says it targets collecting about 330 million dollars from the nationwide campaign which will last 300 days in a similar operation to the electricity campaign to curb massive thefts and collect accumulated unpaid bills which has brought an extra 100 million euros to the state coffers since its launch in late 2014. The country’s central bank says the payment of accumulated unpaid bills has also affected household consumption.
“The fight against informality will be the topic of this third 300-day period in power and will harmonize since the beginning operations among the customs and tax administrations, the Labor Inspectorate and State Police,” Prime Minister Edi Rama warned on Monday ahead of the start of the nationwide campaign.
“In its final goal, this is of course an operation which targets reducing taxes and increasing wages but on a very solid basis without infringing the macroeconomic stability and the fiscal consolidation process we have undertaken with determination in cooperation with the IMF and other financial institutions,” he added.
The warned operation has caused panic among registered businesses fearing fines and seizure of goods they possess without the value added tax receipt.
Local media reported on Tuesday businesses insisting that customers take their tax receipts even for products such as vegetables.
Meanwhile, long queues are still reported with regional national registration centres with business owners registering or deregistering their businesses.
Lots of informal small businesses say they will close down claiming they cannot afford buying costly tax registers and pay taxes at a time when consumption has reduced and competition is tougher.
A survey carried out by the economy ministry has shown around a third of businesses operating in Albania are not licensed at all, do not have cash registers or do not use them at all. Half of the businesses operating in Albania do not issue tax receipts. says the ministry.
Business representatives have hailed government’s initiative to curb informality, estimated at around 30 percent of the GDP, but say the nationwide campaign should be led without creating panic and using extreme measures.
“The business community must be considered a partner and inspections against informality should be carried out without damaging partnership with fair businesses,” says Nikolin Jaka, the head of the Tirana Chamber of Commerce.
The Albanian economy registered sluggish growth rates of 1 to 2 percent in the past three years and is projected to grow by 2.7 percent in 2015 affected by the escalating crisis in neighboring Greece, the country’s second trade partner and the host of about 500,000 Albanian migrants, and poor recovery in top trading partner Italy.
Source: Tirana Times