The process of identification is usually done by the Department of State Budget Revenue?s Audit, but there are also cases when they are identified by the other departments of the SSA too. Open Data Albania has examined the performance of this indicator reported by SSA for 2008-2012 period.
Source : Supreme State Audit
Processing and comments: ODA
As can be seen from the graph, the economic damage recorded in the taxation sector has been growing in the 2008-2009 period and was later characterized by a sharp fall to the minimum value reached in 2012, with about 38 million ALL recorded against 2.5 billion ALL in 2009. In 2008, the damage in this sector was approximately 1.88 billion ALL and a year later it rose by 34% to reach the highest point of the period taken into consideration.
The main areas that cause the high level of this damage were the tax liabilities for income taxes and penalties and also tax liabilities for VAT and the corresponding penalties. Thus, in 2008 the damage deriving from tax liabilities was about 1 billion ALL, or in other words about 52% of the total damage in taxation, caused mainly by taxation branches in Tirana (about 630 million ALL), Vlora (598 million ALL) and Saranda (148 million ALL). In 2009, the greatest damage resulting from audits performed belonged to the Regional Tax Service Agencies in Durres (about 800 million ALL), Korce (587 million ALL), Fier (338 million ALL) and Lushnja (213 million ALL).
After 2009, the situation reported on the economic damage in the taxation sector changed. Under the new law no. 9920 “On Tax Procedures in the Republic of Albania”, Article no. 25, 63, SSA auditors could not control the review of files handled by tax inspectors because of the right enjoyed by the employees of the central and local government tax administration to maintain confidentiality of the taxes and the financial data of taxpayers secured on their duty. This means that after 2010 it can?t be discussed for a decrease in the damage of the taxation sector to the state budget, for a increased responsibility in the data?s management or maybe the decline of income tax evasion, but for a sector that can not be controlled as before, or even further, for a sector that is out of the control system.
This fact undermines the state budget twice, first because the damage can not be calculated and the ones responsible for it can not be identified and secondly, the damage can not be compensated. This is one of the main reasons that explains the downward trend of the damage in the taxation sector in the last two years 2011, 2012, during which the SSA can only control the application in principle of the law, regulations and instructions in force. However, the positive effect that the potential growth of the quality of tax administration work may have had, can?t be overlooked .
The following chart gives the weight that has occupied this sector in the total damage reported over the years, and also in relation to the total expenditure of the State Budget for each year and GDP.
Source: Supreme Audit Institute, Ministry of Finance, the Council of Ministers
Processing and comments: ODA
As can be seen, over the years, the weight of the economic damage occupied by the taxation sector to the total damage has been declining from 46.8% in 2008 to 34.7% in 2009-in, to reach 0.7% and 0.28% respectively in 2011 and 2012.
- The data on the economic damage for the 2008-2012 period were obtained from the SAI Annual Report for each respective year.
- The data on the total expenditure for the State Budget were obtained from the Fiscal Bulletin for the last 4 months of each year. The GDP data refer to no. 1 DCM, dated 23.01.2013 “On approval of the macroeconomic and fiscal framework” for the 2014-2016 period.