Taxes can be deleted or not paid in cases where they deal with evasion. Such examples are, as unreported income or are called under or no reporting incomes serving as a lower tax base to calculate tax and consequently to pay less tax dues. Another example for how taxes can be avoided or removed is by shifting the location of the business from a geographic area to another. Deviation motives are clear, but what remains unclear is economic cost calculation that it costs to the country and the welfare of its people.
Evasion can cause legal consequences in the way of the organization of work by choice inefficient oriented organization. To avoid distortions that may have born between economic activities in relation to each other, given the different growth rates and by a very great change of welfare created by each economic sector to another, as a result of infrastructure changes the scheme businesses will probably be the function of progressively differentiated taxation of economic sub-sector and one from another. For evasion that would be a government “product” that will fight it’s spreading. Evasion tends to melt from the reduction or harmonized tax differentiation in general; you must pay each of us. This evasion will not seek to remain ever dependent on the possibility of being followed and punished. Also, awareness of individuals increase opportunities of non using public services (social benefits and health insurance, pensions, etc.) in case of continuous evasion is a moment to be seized by the government as a factor to be used in reforming its agencies of fiscal revenues.
Of course, that the existence of poor areas and lack of public services: as infrastructure and social services as it is still a hotbed of evasion bearing. Of course, elements that erosion of the tax base implies a cost increase in general government, as in terms of revenue growth, as well as in terms of restricting the supply of public services different areas of the country. I cannot say we are close to this goal, as long as we can still far from being comparable to indicators of collection of revenue in relation to GDP in the last of ’80. While in those years the revenue collected for each fiscal year to the extent of about 46% in relation to GDP, today we are still half of this report. Precisely, it can be called a cost that comes from tax erosion. Policies and words referred to by many analysts it takes the wind affect the achievement of the indicators to be the country’s capitalist development, if it does not contribute to any public employee and manager that has the functional task, but each employee and indirectly related to the fight and clamping of the elements that make fiscal erosion.
An erosion of the taxable base has spread considerably and that attracts attention is the mobility of the taxable base. Changes in technology, those entries with great volumes in Albania, especially those related to the telecommunications technology and processing of raw materials, being followed by the liberalization of financial transactions for the fiscal costs related to the opportunity have increased the tendencies for tax evasion. Performing business functions that have entered in our country from abroad – in the form of companies or MNEs representative, in the form of concentration in local businesses as the organizational structure holding have increased opportunities to their taxable base by hiding fiscal management through the gaps, the portion of income that should have submitted as the basis of income to be taxed. Taxation in our country has been a factor, which so far has led to increased investment, despite that not all scholars may think in this direction. But they must be part of continuous and transparent information to the Albanian public, so that the “trial” of the Albanian society groups have more information for them processed and in this way to achieve and make the appropriate pressure depending on the interests of bilateral social groups, parliament and government.
Movement and change of geographical location map of Albanian businesses is a phenomenon that is impacting the goals and administration efforts to expand the taxable base. This expansion, in which the tax authority has not benefited the large increase in the income tax, has led to shrinkage of the exploitation of human resources according to business mobility. In other words, this means that the structural organization of human resource of tax administration are concentrated mostly in the metropolitan area around Tirana (capital), while business expansion map has gone close to natural resources or lower human resources areas or not trained as needed for control and tax assessment. Order to fit mobility management function of current and future but businesses would be concentration on the basis of administrative prefectures and not as we are until nowadays. Meanwhile, current tax branch, with a lower taxable base will may be functional for the administration of local taxes and personal income tax if they are closely connected with insurance contributions in order to offer quality services coming from experience gained in the central tax administration of these employees.
The threat it has brought that taxable income base in the following years has distorted the implementation of management policies that would be more effective than that. Not all bases are taxable and the same mobile non taxation case of some of these bases is part of distorted taxable of fiscal management. Non application of consumption tax (VAT) on transactions of financial instruments have made the “boil” an income tax, who have not served to strengthen the banking system in terms of its main functions, lending to the levels required by the market and increased flexibility of the system of lending.
Most important factors that explain the concentration of taxpayers with higher incomes in particular geographic areas are settled and infrastructure quality public service-oriented local in help of economy and as a result to nation. Although fees and taxes are the means to affect this concentration we cannot say that it is the most important factor.
In this period of economic growth in a transition environment, the recommendations made by foreign monitors itself has provided assistance by helping the government to make their implementation in a coordinated way and by raising on this basis, the system monitoring the application of these recommendations.
The challenge for policymakers will be to respond to these developments to ensure that the necessary government expenses can be guaranteed and of course trying to minimize distortions of the legacy of fiscal management. By the first view of globalization tendency and threat that comes from this, a strong response to this development will be the time of administration involvement in a greater cooperation and increased exchange of information that has been lacking in all these years. The only ones that have won have been individuals who now feel strong and rich, those who have lost are the states who have unmet services standards and integration time that is required.