Missed Targets Leave Hole in Albanian Budget

An Albanian minister said the budget may have to be revised to take account of lower than expected revenues.

Lower prices for key export commodities such as petroleum and minerals reduced growth in revenues during the first three months of 2015, the Deputy Finance Minister, Irena Beqiraj, said on Wednesday.

Overall revenues missed the target by 2.6 billion lek (18.5 million euros). Revenues from taxes and duties were 44 million euro below target but were partly compensated for by cash from privatization receipts.

“We expect a negative effect of 6 billion lek (44 million euros) on revenues from falling prices on minerals", Beqiraj said.

Albania earns about 100 million euro a year from taxes on oil and other minerals extracted in the country but revenues have been hit by the sharp drop in the international oil price.

Beqiraj said other difficulties faced with other goods, such as the fall in tobacco exports, could be recuperated in the following months.

However, she admitted that the centre-left government may have to revise its budget later this year.

Albania has upped several taxes this year to increase revenues and curb public debt, which at 69 per cent of GDP is considered too high.

Authorities have been criticized for failing to collect more revenues despite hefty increases in taxation on fuel and tobacco.

Revenues are also allegedly being hit by the increased activity of smugglers, especially in the border areas along Macedonia, Kosovo and Montenegro, where cigarettes are cheaper.

Albania hired the UK tax consultancy firm Crown Agents to increase custom revenues by at least 100 million euros per year. However, earlier this year, it admitted that the expected results had not been achieved.

The government of Socialist Party leader Edi Rama is also being criticised for hiring inexperienced party supporters to work in the customs and tax departments.