Albanian authorities must secure parliamentary approval to bring about much-needed improvements to the country's tax regime, the International Monetary Fund (IMF) has said in its latest Article IV consultation for the country.
The report said that the country's tax administration is "inefficient" and the development of a new property tax system has been delayed until 2017.
It noted that tax revenues, particularly value-added tax revenues, have been impacted by lower-than-expected oil prices and consumption and by inflation.
The country's 2017 Budget seeks to raise oil-related revenues, broaden the base for the circulation tax on luxury cars, reduce exemptions, and introduce pilot projects to improve its current area-based property tax, the report said. Albania also plans to increase cigarette excises starting in 2018, to gradually meet EU levels. The authorities have also committed to address the increasing stock of VAT credits.
The IMF called on Albania to streamline VAT exemptions for imports of machinery and equipment, and refrain from announcing any tax amnesties or new tax exemptions or preferences without prior consultation with the Fund.
Albanian Minister of Finance Arben Ahmetaj has declared recently that after general elections there will be a new program in place with International Monetary Fund (IMF).
“Currently there is a joint instrument approved by the Board, an instrument that monitors the government on all commitments made throughout 2017. We switch over to a new relation with IMF, which is monitoring after the arrangement, a close cooperation with IMF, while after elections it is the incoming government’s target to decide on a fresh program,” he said at a press conference.