Published on : 09 October 2017

2018 Budget in consultation with citizens of Lezha: There is no tax increase

Speech of Prime Minister Edi Rama with citizens of Lezha District on the priorities of the 2018 budget:

We’re at this stage after we’ve made a significant cycle of public hearings, also in the district of Lezha, during the month of July, from which we’ve received not a few indications from citizens about the needs, the priorities, and so on. Meanwhile, at a time when we need to undertake some very important steps, whether from the standpoint of state-building or from the point of view of capital expenditure, i.e., investments, we have launched an important operation, thus taking the fight against informality to a new stage. This operation will continue with intensity, as it continues throughout Albania. Meanwhile, as we have stated, we will include all businesses in the VAT scheme.

Unfortunately, the opposition has built a front which, willingly or unwillingly, has become a shield to informality because claiming that you still want to keep part of the trade activity in Albania, part of the whole activity as entrepreneur in Albania, in the lower part of the pyramid outside the VAT scheme, means that either you don’t understand or you don’t have the courage to face the real problem which is the problem of the gap created because of this division for evasion by the large companies that take advantage of the small businesses in order not to claim the VAT exemption and therefore put in their pockets significant amounts of money that are of the public.    

As usual in these cases, whenever there is an attempt to make a reform, there is a normal reaction but what is not normal is that the effort against the reform is done with catastrophic arguments such as a bunch of businesses will shut down every day, prices will increase by X%, it will be catastrophic, and so on. The same would happen one year ago when the reform in higher education started to be implemented where, for objective reasons, and also because it was the first step, the first moment, there was also confusion, some concern from parents and students, because also of the lack of understanding the system and the need for more time. It was said that it was the end of everything, that it was the downfall of the university system, it was said that it was the beginning of an inhuman torture towards the young people and towards the parents, and here we are today when the process is being completed in whole.

Upper secondary institutions are about to start lessons in a few days, and no problem or concern has emerged because the system is now consolidated and the high school graduates who are about to start their university life know very well what they should do, the criteria they should meet, how they should move within the system in order to get what they are entitled to according to their merits.  

And in a proper merit system where it is the grades, the State Matura assessment and the computer that decide, there is no chance for someone to overcome someone else by using the position of a friend or by paying an amount of money, and there is no chance that somebody else will not get what he or she is entitled to, because they do not know anyone or are not able to pay a bribe.

The same can be said for all the reforms, although no reform is perfect, although all reforms require an ongoing improvement in the process because some unpredictable issues emerge from the very process, and so on. But one thing is certain, we will go through with this reform against informality in order to have more income and spend more for the people, whether in terms of investment or in terms of public and social services because it is unacceptable that part of the income that should go back to the people from our tax on value added, ends up in the pockets of a wealthy bunch of people. And this is a fact that shows how we are trying at every turn, not with words but with deeds, to be right and to do fair policies rather than policies that support the rich to the detriment of the poorest; policies that support large companies to the detriment of small business or to the detriment of consumers.

Actually, those who accuse us of this today are defending informality and the evasion of the large businesses to the detriment of the consumers and of the citizens because at the end of the day it is money that should go to the budget and should be spent on public goods for the communities and the citizens.  

On the other hand, as far as investments are concerned, we are at a stage where we are emerging from a very dramatic investment-related situation where, in addition to leaving a debt-laden mountain, we have inherited a significant number of poorly-executed and badly monitored contracts, and above all, they were not prioritized. This means that we will continue to allocate money in order to close part of these inherited contracts, and in the meantime we will start some works, in Lezha as well, which are very important and even strategic.

On the one hand, the completion of the Milot-Lezhë segment which is part of a very important national axis, in order to finally start work on the road connecting Shengjin with Velipoje which will have a very important impact in terms of tourism, of the economy and in terms of increasing exchanges beyond the border. It is a strategic road and time has come to do it. We’ve been working on the project for some time now and we will start also with its funding.   These are two very important works for this area, and we will continue to invest in furthering the irrigation and drainage rehabilitation project. In this area there was a considerable amount of agricultural land that was not watered and drained in the past, while today it is, but there is still a lot to do.

The same happens with the water supplies, a story on their own. We have designed and started the project, but now we are at the stage where we need to take forward with strength and determination the water reform by reforming the whole system of water supply enterprises in Albania, in order to guarantee that every enterprise will carry out its own task and won’t keep accumulating debts face to the inexistent service they provide.  

We have been and are very eager to support urban and social development in the municipalities of this county, starting from the Municipality of Lezhe, but not forgetting Kurbin and, of course, Mirdita. Some of the funds will go to complete the launched projects and to launch new projects in cooperation with local leaders indiscriminately. Colours are not important in this case because it is important that we do all together everything possible and maximally use whatever we can in order to do more because, regardless of their beliefs, there are everywhere people in need who deserve increased attention, more investments and more transformation.

The same in the field of education and health.

In order to do more we need to create more financial opportunities. And we don’t have to increase taxes in order to create more financial opportunities. We don’t increase taxes. In cooperation and dialogue with mayors, but also in view of the modernization of the cadastre system and of the construction of a fiscal cadastre, we are reviewing the property tax, a tax that goes exclusively to the municipalities, rather than a tax that is taken by the state budget. In Albania this tax is outside any kind of parameter, if compared with Kosovo, with Macedonia, with Montenegro and with other countries.

In terms of income tax, whether personal income, corporate income tax, or small business tax, nothing will change. Small business has zero tax and it will continue to have zero tax to a certain limit, of course when it is small business.

One of the reasons for the unlawful cooperation between the big business and the small business for not issuing and getting the VAT bill, is that by receiving the bill, part of the small business goes beyond the prescribed limit and is actually discovered that it is not a small business. There are not a few businesses that are declared as small businesses but are not such. By closing the VAT scheme we will have a clearer picture of the turnover. Of course, we won’t do any change in relation to the tax on the turnover where the limit of the small business has been established. Those who have it zero, will have it zero. 15% of the large companies, will remain 15%. Meanwhile, with regard to the tax on personal income whether in the state or in the private sector, it will remain unchanged.   

We will also fund more services for citizens in order to increase the quality of services in the counters where services are provided. Citizens should know that they don’t need to apply for not a small number of documents which they were asked to submit until a few weeks ago in order to be provided a service, ranging from personal certificates, family certificates, pension certificates, and so on. From now on, state office that need these documents won’t ask them from the citizens, and the citizens won’t pay any penny for a certificate. Unfortunately, we’re still at a moment when certificates are still printed out because registry offices haven’t stopped the process yet, a process that is excessive, tiresome, with costs and totally useless.

We will continue to eliminate documents. No later than yesterday, we have abolished the obligation of citizens to apply for the criminal records. The criminal records certificate must be obtained by the requiring office, just like any other document. If a citizen goes to a state office to get a service, all the documents required for that service and which can be obtained from state offices, have to be obtained by that specific office issuing the service from the electronic service we have launched. We worked four years to launch this electronic system, and today we have a significant number of documents produced by the system.     

At the government meeting a few days ago, we passed also the decision on the electronic seal. So every certificate and every necessary document that is produced by the system is a valid document, as if it borne a notary stamp. This is very important because it is in vain that people continue to waste time, continue to go to the civil registry office and continue to pay in order to have printed certificates, and not just certificates. Only in the section dealing with entrepreneurship 24 documents have been removed, equal to 56 years lost time in a single year.

These facilitations will have a positive impact, whether in a significant reduction of corruption in state offices or in creating a much more positive climate in the relations of citizens and business with the state, and it has also been proved that it will have a direct impact on economic growth. We want the economy to continue to grow. Today we are in conditions when the economy is over 4%. This is not enough to make economic growth be felt in all families, and it has been proven that in Albania's standards, in the income Albania has, in the income of Albanian households, we will go to 5% so that the growth is felt in every family, really. We are convinced that by the end of the second year of the mandate, we will go to 5% thanks to the investments we will make and thanks to all these measures we will take to maximally ease bureaucracy and maximally facilitate citizens and entrepreneurship in relation to the state machine.

However, this is a very general overview and I am here, together with the Minister of Finance, to answer questions you may have or to listen to specific requests and complaints. Before somebody mentions the road of Torovice, I want to underline that that road, which has become a wound, a gangrene for more than a quarter of a century, is a priority for the entire area and we will definitely find the opportunity to start and rebuild it during this mandate. I cannot say that it will start today, it will not start today because we want to go first with the national axis that will bring a pretty positive impact for the entire Region. We want to start with the road connecting Shengjin with Velipojë, which is strategic for tourism, for the economy and of course, then it will be the turn of Torovica.

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