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Prime Minister Rama gives the coded message, warns of great change in Albania

Prime Minister Rama gives the coded message, warns of great change in Albania
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Ekonomia

Finance Report, ALL 36.2 billion loss in the state treasury during this year, problem Customs and Taxes

Finance Report, ALL 36.2 billion loss in the state treasury during this year,

The state coffers continue to suffer deep losses every month. Since March, when the pandemic started, the Albanian government has been forced to increase expenditures to a much higher balance than the revenues collected. In fact, month after month, revenues have fallen sharply and plunged the state budget into crisis. The Ministry of Finance has recently published the 10-month report where revenues record ALL 36.2 billion decrease compared to a year ago. According to the report, revenues have even shrunk significantly compared to the government's latest forecast, made in July after the revision of the normative act for the second time. While on the other hand, expenditures have increased by ALL 22.6 billion compared to the 10 months of last year, an increase that was not foreseen in the initial plan of 2020. "Total revenues for the 10 months of 2020 were realized at 347 billion, with a decrease of 36.2 billion ALL compared to the 10 months of 2019, when the state treasury collected 383.6 billion ALL, taking again the biggest blow from tax revenues collected from VAT, profit tax or personal income. Total public expenditures, for the 10-month period of 2020, reached 412.65 billion ALL with a realization of 89.6% of the plan for the period, while compared to the same period of 2019 this item has been 5.8% higher or about "22.6 billion more", it is said in the report. Also, the tables with fiscal data published by MFE show that the level of deficit in the tenth month of 2020 resulted in about ALL 65.5 billion from about ALL 107.6 billion planned. Compared to the same period of the previous year, where the deficit level reached the amount of about ALL 6.6 billion, for the 10-month period of 2020 the deficit is ALL 58.8 billion more. The chart below shows the trends of the main indicators of the state budget.

Taxes and Customs are ruined

Customs and Taxes continue to perform very poorly and ruin the state coffers. Referring to the report of the ministry from ALL 36 billion minus in the budget, ALL 32 billion losses were caused by the Tax Directorate and the Customs Directorate. These two items have worsened their performance and in relation to the initial plan of the government. Revenues collected by the General Directorate of Taxes and the General Directorate of Customs (including Contributions collected by the GDT), were estimated at 304.6 billion, 32.2 billion less or -9.6% compared to 2019, and "3.45 billion or 1.1% less than the annual plan (revised according to AN 28) for 2020", the report says. According to the ministry, ALL 81 billion are revenues from VAT on imports with a decrease of 9%, while excise revenues were ALL 36 billion with a 7% contraction. On the other hand, tax revenues have decreased by ALL 20.6 billion, where the main weight in the non-implementation of the plan is occupied by the non-implementation of Profit Tax and Personal Income Tax. "Due to the postponement of installments for the payment of profit tax on business assistance, these revenues have been realized 7.4 billion ALL less than 10 months 2019. The main factor in the non-realization of Personal Income Tax is the reduction of the number of employees and the reduction of the duration of work, by the taxpayers as a result of COVID 19 ”, argues the ministry. While spending on these two items has increased immediately as a result of the need that arose from the economic crisis brought about by the pandemic. Meanwhile, current and capital expenditures, have marked a realization respectively in the amount of 96.8% and 85.4% of the plan of the period. While, in annual terms they are realized in, respectively, 77.8% and 64% of the annual plan.