July 31, 2019 / 4:50 PM / 19 days ago

Albania launches online billing to fight tax evasion

TIRANA (Reuters) - Albania will roll out an online invoicing system in January to stop businesses evading taxes, raise revenue and bring the tax system into line with practices in the European Union which it wants to join, officials said on Wednesday.

FILE PHOTO: Albanian Minister of Finance and Economy Anila Denaj delivers a speech at the parliament in Tirana, Albania, January 31, 2019. REUTERS/Florion Goga

The Socialist government of Prime Minister Edi Rama launched a campaign to encourage companies to register and issue receipts when it came to power in 2013. But despite early successes, many firms still operate beyond the reach of the tax authorities.

“The main goal is to fight fiscal evasion through healthy legislation, technology and information on real time for every transactions, product or receipt,” Finance Minister Anila Denaj told a news conference.

The minister announced the initiative after personally leading checks of businesses for a week that uncovered 1,600 hotels listed on a booking site that had not registered with the tax authorities at the peak of the tourism season.

Denaj had earlier said 160 retail fuel suppliers and 453 construction companies were also found to be not paying taxes.

Some hotels were shut and only re-opened after they registered with the authorities.

The minister has told businesses to hand out receipts or face fines.

An International Monetary Fund said the shadow market accounted for about a third of economic activity between 1991, the year communist rule ended, and 2015, by which time the country had become a NATO member and candidate to join the EU.

Under the plan outlined by the minister, businesses will report transactions with customers online to the tax authorities from Jan. 1, and from the start of 2021, all business transactions and dealings with the tax authorities will be electronic.

Tax Department General Manager Delina Ibrahimaj said the authorities expected an increase in collection of value-added tax (VAT) of up to 15% and an improvement in income tax collection, citing experience from countries with internet-based systems.

Reporting by Benet Koleka; Editing by Edmund Blair

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