IMF expresses concerns over Albania's poor performance of incomes

The International Monetary Fund (IMF) on Friday expressed concerns over the poor performance of incomes in the budget of Albania, urging the government to take measures to deal with the issue.

The Executive Board of the IMF has discussed the fourth review of Albania's Extended Fund Facility (EFF) without yielding any agreement.

"During this year, the incomes fell significantly compared to expectations and the plan," said Jens Reinke, the IMF's resident representative in Tirana.

"At this point, in order to complete the signing of the agreement, we discussed with the government about the measures on the side of taxes, which would fill the gap," said Reinke.

"But the government decided to work first in the direction of administration before it engages in discussions for new policies of taxes, which in my view, is a convenient and good way to move forward," Reinke added.

In the first five months of 2015, incomes from taxation and customs were far short of expectation. The IMF is concerned that the causes of the decline are long-term, which might put the program for debt reduction at risk.

"Some of the reasons reflect external factors, such as the fall of the price of oil, low interest rates or low inflation. But some others are linked with the implementation of the law and tax rules. So there is a problem of administration. Taxes are not very low in Albania, but the performance of incomes is not strong," Reinke said.

"The program is based on the fiscal performance and reduction of debt. If some indicators do not go according to the plan, then corrective measures are needed," Reinke said. Endi