Private businesses that operate in Albania, are not against the audits carried out by tax inspectors, but they request a more coordinated operation without pressure. Such appeal has been directly voiced by business representatives in front of the highest taxation authorities. As of 1 October 2017, these authorities have launched the so called “anti-informality 3” operation in an attempt to fight informality among businesses. “I wanted to see a constant fight against informality and not a fight through campaigns and violent inspections with inspectors who block the business activity and who want to audit everything”, said the representative of the American Chamber of Commerce, Alketa Uruçi. Uruçi also voiced her concern over the treatment shown by tax inspectorates. According to her, the inspectors who are sent for auditing must be selected based on the nature of the business activities. “They may all be large sized businesses, but they must be audited in different ways and manners, because informality may be in different aspects. I would like to see professionally trained inspectors; inspectors who have been instructed in the office with clear ideas as to where they can find informality and what they should be looking for”, she further appealed. Meanwhile, she also highlighted the fact that “unfortunately, there are inspectors who come and inspect for a period of 2 to 3 months, inspect all sorts of paper work, they claim that they have identified discrepancies, but when they come back, they say that everything is in order”. According to her, “this way, it’s a waste of time for inspectors and taxpayers too.” “This is why audits should be more focused, shorter in time and of a higher quality”, she said.
Another concern that was voiced during the meeting was the fact that a special practice must be put in place regarding audits.
“Audits by tax inspectors must be more focused, shorter in time and of a higher quality. Fight against informality must be constant and should not be led through campaigns and violent inspections by inspectors who block the activity of the companies”.
Tax authorities: There’s room for improvement
Tax administration admits the fact that the anti-informality operation launched by this administration, does have room for improvement. Although it doesn’t withdraw from this operation, this administration says that there may be changes during the application of the measures. “The operation has just started and this is the first phase, which will last 3 months. Then, this action will be more moderate. We admit that there is room for improvement. The action plan against informality has been perceived to be cautious, in particular in this first phase of the operation”, says Enkelejda Pipa, senior official at the Taxation Department. Meanwhile, she has stated before the business community that a small number of taxpayers have been subjected to inspections, mainly in the sectors of construction, commerce and services. “Meanwhile, a large number of taxpayers will be audited from the office”, she added.
No more printed documents, everything will be online
Many documents which are issued by state institutions will no longer be received by Albanian citizens in a printed form. Instead, these documents will be received online. This fact was announced by PM Edi Rama, according to whom, this measure is being taken with the aim of reducing the number of printed documents that citizens obtain, aiming to release as much positive energy as possible and boost economic growth, which is closely connected to the reduction of the bureaucratic procedures. So, by quoting a special guideline issued and signed by the minister of Finance and Economy, Arben Ahmetaj, he says that “there’s a significant number of paperwork which translate into corruption, long waiting periods, costs which will no longer be billed to citizens, starting with personal or family certificates. The same goes for official documents relating to pensions, healthcare cards and a number of other documents which up until yesterday, were a real nightmare for the citizens and also a source of corruption. Today, citizens must refuse every office, every clerk and report them if they ask them to bring printed copies of these documents”, he explained.
These are the documents
that will be found online:
-Certificate of registration at QKB+NIPT
-Company’s history extract
-Proof of the payment of contributions
-Proof of tax obligations
-Proof of the register of the investor
-Proof of the payment of obligations
-Proof of unregistered individuals
-Proof of the company’s status
-Proof of the revenues for the past three years
-Proof of individual contributions
- Proof of possession of vehicles
Months will be the duration of the anti-informality 3 operation, applying to the four main sectors of the Albanian economy: construction, commerce, agriculture and services, which has started on 1 October 2017
Areas nationwide are being audited by 95 groups which have started their operation in an attempt to identify unregistered businesses, cases where businesses don’t issue a VAT receipt, etc.
A recent report published by the tax administration, reveals that the sectors with the highest risk are: free lancers, hotels-restaurants, trade and construction. According to tax experts, all of these sectors are more bound to evade taxes. Based on the data issued by this report, “Dentists, accountants, lawyers, notaries, ets, have a 53.8% risk of not paying VAT and a 35% risk of not paying tax on profit”. In the commercial sector, the risk of not paying VAT is estimated to be around 61%, while the risk of not paying tax on profit is estimated to be 35.9%. Meanwhile, hotels and restaurants have the highest risk of evading tax on profit with 57%.