Tirana, March 10, 2015/Independent Balkan News Agency
By Edison Kurani
Minister of Finance, Shkelqim Cani has analyzed the economic and financial situation in Albania, stopping on the 2014 figures and the first months of this year. Cani is optimistic that a number of reforms that have been taken, will give positive effects for the Albanian economy. He admits that the majority of these reforms were painful, but he adds that this was the only solution in the conditions that the economy and the state are in.
Minister Cani also stops on budget revenues. He admits that there has been a fall in customs revenues and he explains the reasons. Informality is another domain addressed by the Albanian government. Cani details the five sectors which will be targeted by the campaign.
Drop in customs
Cani says that 2014 ended successfully, with a significant rise of tax and customs incomes. According to him, plans have also been exceeded in the first two months of 2015 and adds: “In general, I would positively assess the work in customs”.
But, projections for 2015 are lower than 2014. Mr. Cani says that this has an explanation: “We have had problems with the mineral tax and the oil tax, which is a fundamental export product, but also other minerals, which have lost market and the price of which has fallen. The import of fuels has fallen, because production of oil in the country has increased. The fall of the price of oil has had an impact on revenues”, Mr. Cani said.
According to him, the anti-tobacco law has also had an effect on the drop of customs revenues. “The anti-tobacco campaign has yielded its results. We have seen that smoking has significantly dropped in closed premises, as we expected. When the campaign is accompanied by a rise in duty tax, then this leads to a fall. According to international standards, this may lead to a fall of up to 10% in the amount of smoking”.
Year against informality
Year 2015 has been announced by the Albanian government as the year against informality, corruption, evasion and contraband. Minister Cani says that the campaign against informality will be spread in all the sectors of the economy, but the government has identified five risky sectors, where the campaign will focus: “The market of fuels, the wholesale market, VAT receipts, free professions and the declaration of incomes by senior officials, especially those people who earn more than 20 million a year (15 thousand Euros), because the level of annual self-assessments is relatively low in Albania, compared to what it should be”.
Economic growth will be revised due to the floods
The government admits that the floods had an impact on the economy. The effects from the floods, both for individuals and also for the agricultural production, are being assessed. The government has taken experts of the World Bank, who use international methodologies in order to carry out this assessment.
Minister Cani says that the floods have an impact, but adds that the economy doesn’t only depend on one factor. “The floods are a great misfortune for the area that they affect and all the necessary support has been given to recover the great losses of that area. But, if we consider the theory of compensation, the rain falls that struck those areas, helped the energy sector, increasing the capacity of the production of energy in Albania. We have effects from different directions”.
Will the election year play a role?
This year is an election year for Albania and up until today, in election years there have been populist policies in order to receive as many votes as possible.
Mr. Cani comments on this: “It’s not a crime, but populism is not a good thing, because it’s a barrier for the economy to continue in its normal path”.
But is the current government doing this?
Mr. Cani says that some of the reforms, not only they do not have populist effects, but on the contrary, they can “potentially” put the government in a difficult position with the voters: “We have the reform in pensions, which many governments didn’t dare to address and this government addressed it. We have the territorial reform; all governments could not undertake it and this government dealt with it and dealt with it in an electoral year. We have the reforms in the level of taxation. For two years in a row, we reformed the system of taxation and relations with the business. Some taxes have increased, but a lot have also been falling, although they are mentioned very little”, Mr. Cani says.
He also mentioned other reforms such as in the health service, education, by saying that these are all structural reforms.
The minister also stops on the reform in energy, which he admits that it’s painful, but adds that all reforms will yield a positive effect. “In the energy sector, I have said that it will be a deep and painful reform. It was proven that it was deep, painful and comprehensive. But these reforms were necessary for the economy, reforms which in the medium term, will have their effect in the economy and the budget”. /ibna/