In Albania, the American Chamber of Commerce expressed today “serious concerns” over the draft law on fiscal amnesty, recently proposed by the Albanian government. According to a statement distributed by her “the risks of the new draft law significantly exceed its benefits”, recommending the withdrawal of this initiative.
The draft law provides for the voluntary declaration of an asset with a monetary value of up to 2 million euros, without specifying their source, which is legalized against a tax of 5-10 percent, without any criminal liability, despite the fact that the funds may have been created as a result of crimes various financial activities, such as fiscal evasion, smuggling, or VAT fraud. Meanwhile, no strict mechanisms are foreseen that would exclude the benefits from this initiative and the money generated by serious criminal activities such as illegal traffic. According to the US House, “the provisions of this draft law do not provide guarantees that individuals with serious criminal activities such as drugs, human trafficking, money laundering are exempted from amnesty”.
Another worrying aspect, considered by the American House, is the negative effect on private enterprises, bringing “unfair competition”, since “individuals with past illegal activities, would be favored by avoiding the consequences of the judicial system, investing funds through non-legal channels. legal in the formal economy, as well as paying a lower tax rate (5-10 percent) compared to those involved in legal activities, which currently stands at a total rate of 32 percent. Consequently, these situations will reduce tax compliance in Albania in the future”, the statement underlines.
According to the American Chamber, the initiative risks having consequences in the country’s relationship with international institutions. “Albania’s position in international monitoring programs on prevention and money laundering will worsen. Given that Albania is on the Moneyval gray list of money laundering and prevention, the implementation of this amnesty at these moments when Albania is still working to increase and strengthen monitoring structures will bring a storm of the informal economy. Our main concern is that the approval of this draft law would jeopardize Albania’s official position in the international arena, jeopardizing the EU membership process”, the American Chamber of Commerce emphasizes.
Two weeks ago, during the meeting of the Subcommittee on Trade, Industry, Customs and Taxes between the EU and Albania, the European Commission “underlined serious concerns about the current draft law on fiscal amnesty. It would weaken Albania’s anti-money laundering controls while doing little to enhance the tax administration’s ability to improve future compliance with tax requirements. Moreover – the Commission continued – because non-tax residents, including Albanians living in the EU or the Western Balkans, are included in its scope and are required to import cash in order to benefit from the amnesty, the current draft of the law raises serious concerns for EU member states and other partners, as well as a substantial reputational risk for the country”, the final statement of the meeting pointed out.
Even two years ago, the Albanian government presented a project for fiscal amnesty, from which it was forced to withdraw at the last moment as a result of pressure from both the Monetary Fund and Brussels. According to the American Chamber of Commerce “although the new act has some changes from the previous government initiative undertaken in 2020, these changes are not substantial enough to change the risks raised by it and other partners”.
