Fiscal Adequacy, Timing and Integration

Taxes can be deleted or not paid in cases wheremay think in this direction. But they must be part
they deal with evasion. Such examples are, asof continuous and transparent information to the
unreported income or are called under or noAlbanian public, so that the "trial" of the Albanian
reporting incomes serving as a lower tax base tosociety groups have more information for them
calculate tax and consequently to pay less taxprocessed and in this way to achieve and make
dues. Another example for how taxes can bethe appropriate pressure depending on the
avoided or removed is by shifting the location ofinterests of bilateral social groups, parliament and
the business from a geographic area to another.government.
Deviation motives are clear, but what remainsMovement and change of geographical location
unclear is economic cost calculation that it costsmap of Albanian businesses is a phenomenon that
to the country and the welfare of its people.is impacting the goals and administration efforts to
Evasion can cause legal consequences in the wayexpand the taxable base. This expansion, in which
of the organization of work by choice inefficientthe tax authority has not benefited the large
oriented organization. To avoid distortions thatincrease in the income tax, has led to shrinkage
may have born between economic activities inof the exploitation of human resources according
relation to each other, given the different growthto business mobility. In other words, this means
rates and by a very great change of welfarethat the structural organization of human resource
created by each economic sector to another, asof tax administration are concentrated mostly in
a result of infrastructure changes the schemethe metropolitan area around Tirana (capital), while
businesses will probably be the function ofbusiness expansion map has gone close to natural
progressively differentiated taxation of economicresources or lower human resources areas or not
sub-sector and one from another. For evasiontrained as needed for control and tax
that would be a government "product" that willassessment. Order to fit mobility management
fight it's spreading. Evasion tends to melt from thefunction of current and future but businesses
reduction or harmonized tax differentiation inwould be concentration on the basis of
general; you must pay each of us. This evasionadministrative prefectures and not as we are until
will not seek to remain ever dependent on thenowadays. Meanwhile, current tax branch, with a
possibility of being followed and punished. Also,lower taxable base will may be functional for the
awareness of individuals increase opportunities ofadministration of local taxes and personal income
non using public services (social benefits and healthtax if they are closely connected with insurance
insurance, pensions, etc.) in case of continuouscontributions in order to offer quality services
evasion is a moment to be seized by thecoming from experience gained in the central tax
government as a factor to be used in reformingadministration of these employees.
its agencies of fiscal revenues.The threat it has brought that taxable income
Of course, that the existence of poor areas andbase in the following years has distorted the
lack of public services: as infrastructure and socialimplementation of management policies that would
services as it is still a hotbed of evasion bearing.be more effective than that. Not all bases are
Of course, elements that erosion of the tax basetaxable and the same mobile non taxation case of
implies a cost increase in general government, assome of these bases is part of distorted taxable
in terms of revenue growth, as well as in termsof fiscal management. Non application of
of restricting the supply of public servicesconsumption tax (VAT) on transactions of
different areas of the country. I cannot say wefinancial instruments have made the "boil" an
are close to this goal, as long as we can still farincome tax, who have not served to strengthen
from being comparable to indicators of collectionthe banking system in terms of its main functions,
of revenue in relation to GDP in the last of '80.lending to the levels required by the market and
While in those years the revenue collected forincreased flexibility of the system of lending.
each fiscal year to the extent of about 46% inMost important factors that explain the
relation to GDP, today we are still half of thisconcentration of taxpayers with higher incomes in
report. Precisely, it can be called a cost thatparticular geographic areas are settled and
comes from tax erosion. Policies and wordsinfrastructure quality public service-oriented local in
referred to by many analysts it takes the windhelp of economy and as a result to nation.
affect the achievement of the indicators to beAlthough fees and taxes are the means to affect
the country's capitalist development, if it does notthis concentration we cannot say that it is the
contribute to any public employee and managermost important factor.
that has the functional task, but each employeeIn this period of economic growth in a transition
and indirectly related to the fight and clamping ofenvironment, the recommendations made by
the elements that make fiscal erosion.foreign monitors itself has provided assistance by
An erosion of the taxable base has spreadhelping the government to make their
considerably and that attracts attention is theimplementation in a coordinated way and by
mobility of the taxable base. Changes inraising on this basis, the system monitoring the
technology, those entries with great volumes inapplication of these recommendations.
Albania, especially those related to theThe challenge for policymakers will be to respond
telecommunications technology and processing ofto these developments to ensure that the
raw materials, being followed by the liberalizationnecessary government expenses can be
of financial transactions for the fiscal costs relatedguaranteed and of course trying to minimize
to the opportunity have increased the tendenciesdistortions of the legacy of fiscal management. By
for tax evasion. Performing business functionsthe first view of globalization tendency and threat
that have entered in our country from abroad - inthat comes from this, a strong response to this
the form of companies or MNEs representative, indevelopment will be the time of administration
the form of concentration in local businesses asinvolvement in a greater cooperation and
the organizational structure holding have increasedincreased exchange of information that has been
opportunities to their taxable base by hiding fiscallacking in all these years. The only ones that have
management through the gaps, the portion ofwon have been individuals who now feel strong
income that should have submitted as the basisand rich, those who have lost are the states who
of income to be taxed. Taxation in our countryhave unmet services standards and integration
has been a factor, which so far has led totime that is required.
increased investment, despite that not all scholars