The impact of this phenomenon on the Albanian economy
The impact of this phenomenon on the Albanian economy all of these causes come as a result of the misuse of fiscal policies. I think the fight against tax evasion as one of the tax administration’s primary tasks should be seen as linked to possible corruption within the administration, as an offer made by dishonest taxpayers who try to create the distorted idea of the figure of the taxpayer and the administration he represents. Precisely the presence of this phenomenon and the extent of its spread, of course, lead to a reduction in tax revenues. In Albania, it has been stated that the most significant reason remains the salary of tax inspectors.
If we look at the wages of a tax employee, it is 200-250 euros, compared to the average salary of a tax employee in countries with a developed tax system it is four times higher. For these salary levels, they can create spaces in the districts of inspectors without moral and professional integrity, accepting bribes by taxpayers, making it possible not to come to the tax administration large amounts of income.
Another reason for the emergence of corruption in recruiting individuals who also have shortcomings in basic knowledge of taxes and accounting.
This category, which takes the controller’s name, focuses on the inspection it carries out in unprofessional debates about pencil sharpeners, etc., rather than examining and deconstructing everything that happens in economic activities in Albanian multinational companies. The control strategy needs to do the possible calculation of the inspectors’ corruption to avoid as much as possible the phenomenon. Insufficient economic and legal instruments influence the mismanagement of the situation, which is degrading year after year and has the most significant impact on our country’s economy.
How businesses are handled and the concessions made to those who are most “powerful” in the market is another tax evasion factor. Large companies are supposed to pay more taxes because their income is relatively higher than anyone else operating in our country. But in our country, the opposite current is applied and followed. The strongest declares less income and contributes less to the state coffers, leaving all the burden on those who barely close the month.
Fiscal evasion spread even more for reasons such as:
-The transition period from the centralized economy to the market economy
– Insufficient economic and legal instruments
-Marketing of goods on the black market
These factors do not allow Albania’s economy to improve, and the policies pursued to avoid tax evasion to succeed.
Fiscal statistics are compiled by the Ministry of Finance with the primary purpose of providing periodic information on the performance of income, expenses, deficit, etc., during a particular, fiscal period that can be monthly, quarterly, and annually. Each of us pays VAT every time we pay for a service or goods. When a business does not declare it, this income, instead of increasing the state budget and thus public investment, is lost in the pockets of those who abuse our money.
It turns out that nationwide the leading businesses are:
-production and trade 77.8%
It is precisely these businesses where tax evasion and tax evasion is about 66.5%. These businesses carry out unregistered activities, using fictitious invoices, violating the document’s general principles because sales are not made with invoices but through pocket-to-pocket transactions. In addition to other incoming businesses that flow into the state coffers are:
-taxes from taxes and customs
-security insurance taxes
According to a survey conducted in Albania where more than 70 businesses participated, they claimed that 40% try to hide income, which negatively affects competition and government oversight and public revenue, 29.6% said they do not pay the tax coupon. Another method of businesses that pay as little tax as possible is VAT manipulation.
60% of companies in Albania have confirmed that VAT manipulation is used continuously. VAT-related losses occur through unorganized tax evasions such as non-payment of invoices and tax coupons or a more organized abuse of the system through fictitious transactions with non-existent or bankrupt traders. The tax evasion situation in Albania is not easily identifiable, mainly as there are no accurate statistics or reports from the responsible institutions. Due to the bureaucracy and high volume of cash transactions, it isn’t easy to collect the necessary data. Albania loses potentially about 810m euros a year due to evasion and fraud.