 |
| The Minister of Finance Ervin Meta, source: Ministry of Finance of Albania |
Albania's Council of Ministers has approved the budget for 2024, reflecting a comprehensive plan to drive economic growth and enhance social welfare. With a projected revenue exceeding 7 billion euros and an expected economic growth rate of 3.8% for the upcoming year, the budget outlines a path towards a positive primary balance.
Economic Objectives:
The Albanian Ministry of Finance has set an ambitious goal to reach an average monthly wage of 900 euros within 2024, aligning with the government's commitment to improving the standard of living for its citizens.
To support this initiative, the budget allocates a fund of 11 billion lekë (Albanian currency) aimed at further increasing the salaries of healthcare professionals, teachers, law enforcement, and other public servants. This significant reform in the salary system translates to an overall budgetary impact of 39 billion lekë.
Social Welfare and Pension Plans:
Public Investments and Economic Growth:
With a focus on economic growth, the budget aims to allocate more than 5% of GDP for public investments scheduled for 2024. These investments prioritize enhancing tourism, agriculture, connectivity, and fostering employment opportunities. Additionally, the investment package aims to bolster national and local infrastructure to meet the growing demands of tourism.
Environmental Initiatives and NATO Commitments:
In the spirit of environmental responsibility, the budget supports ongoing reconstruction efforts and the implementation of the Regulatory Act. Furthermore, the government upholds its NATO commitment to allocate 2% of GDP in 2024, a milestone achievement.
Empowering Local Governance:
The 2024 budget significantly increases funding for local government units. With a budget projection of 71 billion lekë, this represents a 10.4% increase compared to the 2023 budget. The grant from the central government to local units accounts for a significant portion, approximately 36.5 billion lekë.
VAT Postponement for Education and Financial Services:
In response to consultations with the International Monetary Fund (IMF), the Albanian government has decided to postpone the implementation of Value-Added Tax (VAT) on education and financial services. This postponement will remain in effect until further notice. This decision stems from the commitment to improve fiscal administration.
Akciza Adjustment:
In response to inflation, the budget proposes an adjustment in excise tax rates. The law prescribes cumulative inflation-based rate indexing every two years. Given recent unusual levels of inflation, the budget suggests an adjustment ceiling of 1.5% every two years.
Improved Tax Administration:
To ensure better tax administration, the budget establishes procedures for exchanging information with international tax authorities. This aims to secure periodic information from parent companies of international groups operating in Albania.
The budget also elaborates on procedures related to the elimination of double taxation agreements, ensuring better administration in this field.
Looking Ahead:
Following approval by the Council of Ministers, the budget for 2024 and the fiscal package will undergo extensive discussions in parliamentary commissions. This allows ample time to address questions and concerns that may arise from various stakeholders, including the media, members of parliament, citizens, and interest groups.