A “tango” with international partners…
It takes two for a tango. In this dancing to celebrate new investments, as always, the government has preferred international partners. However, after almost a year since the agreement of the grant, the International Monetary Fund, a re-turned partner which had missed for some times, considers as problematic the high level of bad loans in our country. The decreasing of the bad loans was the main argument of taking the loan of $ 330 million last year; however the bad loans level still remains near the level of 25% of the total loans.
Jens Reinke, the head of the IMF office in Tirana, has explained:
“Mainly there are external factors such as the oil price that has affected this specific sector in Albania. At the same time, problems in the Eurozone area, especially Greece but not only, has shortened remittances and maybe also exports”.
Still the environment of the loans, despite returned to a positive base, remains in general a question mark for the economy due to these bad loans. At this point the Government, the Bank of Albania and IMF seems surprised that the main proposed mechanism to repay loans apparently didn’t functioned as expected.
Economist consider loans as sweets – nice, but they don’t last long. As such, it will not pass too much time from the moment that the society will have to pay more taxes in order to manage the debts. In fact, this is the scenario that Top Channel has reported: The authorities have agreed with IMF to guarantee the achievement of the fiscal goals and that any weakness in the energy sector reform will be compensated by extra taxes.
Thus, if the financial deficit of the sector will be higher than the pre-determined amounts, the government will be obliged to take extra measures by increasing taxes or decreasing investments. This will happen in order not to affect the overall budget deficit and to stick to the program of debt decreasing, for the which IMF doesn’t accept compromises.
Another international partner of the month was also the European Bank for Reconstruction and Development, with the which it was signed the agreement of 18 mil. EUR. (only building expenses) for the construction of the Vlora’s Bypass. The objective of this bypass is to increase of the traveling rhythm in Vlora, to decrease traffic especially during touristic season, to increase commodity and security in the road, as well as to improve the environment situation in Vlora. This Bypass connects the Levan-Vlora highway with the national road Vlora-Saranda. The length of this bypass will be 29 km. From the online website of the Ministry of Finances it is declared that the project will be implemented from the Ministry of Transportation and Infrastructure, through the National Roads Authority, and it is expected to end by March 2017.
Virtual Border Albania-Kosovo
Since the first meeting of Rama’s government with ex-Thaci’s government, the collaboration between the two countries has been increasing significantly. On February 16th, 2015, in Morina customs office, it was inaugurated “The joint Transit Corridor Albania-Kosovo”, which enables the mutual use of electronic systems, so that the transit process can be done only once. With the inauguration of this common transit corridor, all the current transits opened in the customs’ territory of Albania, will be closed in the Kosovar’s customs destination, avoiding thus stops at the border in order to re-do the procedures. Vice-versa, the transits opened at the Customs’ Territory of Kosovo, will be closed in the Albanian customs destination, exactly like it existed only one custom and not two.
This novelty in the field of market goods exchange between Albania and Kosovo, aims to fasten the movement of goods, to shorten their time being blocked in the custom, to reduce costs for the businesses and to convert Albania-Kosovo border in a “virtual” border.
In partnership with the business
In the framework of the strategy of preventing and paying back the obligations of the state toward the public, on February 4th, 2015, the Ministry of Finances has allocated a fund of around 9.1 milliard ALL to cover the obligations in the following categories:
- Public investments – allocated1 milliard ALL
- Current costs for goods and services – allocated around 2milliard ALL,
- “Others”– allocated 8 milliard ALL, where there are included: 1.6 milliard ALL for compensation of Court Decision, 1 milliard ALL for Expropriations, and around 1.1 milliard ALL for Emergencies and Births.
Ministry of Finances has called through different media all the individuals and private juridical persons, to check the lists with the obligations recognized to them through the Ministry of Finance’s website. In case an obligation belongs to them, they should present themselves as soon as possible to the respective institutions, so that they can facilitate and fasten the process.
The General Directory of Taxes presents:
“Tax inspectors without limits” is the OECD program for strengthening in practice the tracking of price transfer occasions. The agreement signed on February 5th, 2015 between the General Directory of Taxes and the Italian Agency of Taxes, was presented for the public on February 12th, 2015.
The Italian Agency of Taxes declared hopeful that such a project will provide advantages for both countries, improving the level of tax controls, and increasing the level of compliance of large business taxpayers, according to the transnational bilateral nature of such agreements. From the other part, this project meets the government objectives to apply new models that fight fiscal evasion and prevent abusive phenomena.
Moreover, this month the General Directory of Taxes has decided to coordinate its work with the General Directory of Customs. This will be realized based on the bilateral agreement, which considers exchange of real time information, as well as common checks to fight fiscal evasion and informality. Based on the agreement, if a private subject results debtor either towards Tax or Customs Authorities, it will not exercise freely its activity, because it will be blocked also by the other institution as soon as it will be verified that it is a debtor of the partner institution.
However, the same success has not been present this month with regard to tax collection, maybe due to the new online system which came in practice last month. Monitor.al has reported a decrease in absolute terms of revenues compared to the same period of one year ago. The tax revenue that has decreased the most is the tax on profit, a category in the which are collected 60% less than the same period of last year. The Ministry of Finances has justified itself, claiming that even their expectations were lower compared to January 2014, due to the specifics of the new tax system; however no further explanations has been revealed for the decrease on the planned revenues.