Critics warn of deepening inequality, impunity and potential money-laundering exposure.
Tirana Times, January 16,2025 – Albania’s newly adopted “fiscal peace” package framed by the government as a reset of relations between businesses and the tax authorities, has sparked sharp criticism from economists, business associations, the opposition and international observers. Although presented as a technical mechanism to clean up a decade of unpaid tax arrears and improve compliance, the measures raise serious concerns about unequal treatment, moral hazard, weak enforcement, and the potential legalization of illicit proceeds from corruption, narcotics trafficking and organized crime.
The core of the plan consists of two laws: one that wipes out all unpaid tax and customs debts accumulated before December 2014, and another that allows businesses to negotiate voluntary multi-year agreements with the tax administration, benefiting from partial forgiveness of more recent debts and immunity from tax audits during the agreement period. More than €300 million in overdue liabilities older than ten years will be erased entirely, while partial write-offs will be granted for another €1.3 billion in newer obligations if companies pay between 50% and 75% of the principal.
The government insists this is not an amnesty but a “modernization” strategy designed to rebuild trust. Finance Minister Petrit Malaj has avoided the word “amnesty” altogether, arguing that the initiative aims to “improve cooperation” with businesses, while Prime Minister Edi Rama has framed it as a pragmatic solution that rewards voluntary compliance going forward. Yet critics counter that the policy mirrors earlier amnesty proposals rejected in 2020 and 2022 after pressure from the European Commission and the IMF, both of which warned that Albania risked creating a channel for money-laundering if it permitted the legalization of undeclared assets without verifying their origins.
Business owners who have consistently complied with tax obligations say the measures penalize them while rewarding chronic evaders. Cases like a bakery owner in Shkodra, who has paid taxes regularly since the 1990s but now sees competitors excused from years of evasion, capture public frustration. Several Socialist MPs have also demanded transparency, asking the government to reveal exactly which companies will benefit. The Ministry of Finance has refused, citing “sensitive information,” heightening suspicion that politically connected firms, concession holders and businesses under corruption investigation could be among the winners.
The American Chamber of Commerce has warned that the policy undermines legal certainty and the principle of equal treatment. Economic analysts note that while the plan might temporarily boost revenue collection, it risks long-term harm to business competitiveness, tax discipline and Albania’s international reputation. Concerns are especially acute regarding the parts of the package that allow companies to re-declare past financial statements, adjust cash balances, eliminate fictitious liabilities and declare previously hidden assets by paying only a 5% tax without penalties, interest or audit scrutiny. Experts argue that this mechanism resembles a de facto legalization of unreported wealth, potentially offering an entry point for illicit capital from narcotics trafficking, corruption networks and organized crime groups that already exert influence in parts of Albania’s informal economy.
The confusion is compounded by a transitional period during which the laws have been approved by parliament but not yet enacted. Businesses expecting relief report continued aggressive enforcement measures, including account seizures and daily revenue confiscation orders, even for debts that should soon be eligible for cancellation. Tax authorities insist they are only collecting 2025 liabilities, yet businesses say the lack of clarity is deepening uncertainty and damaging trust in the system.
Opposition MP Jorida Tabaku calls the initiative “a disguised amnesty,” arguing it jeopardizes Albania’s compliance with EU anti-money-laundering standards. Economic researcher Zef Preçi warns it could push the country closer to becoming a “fiscal haven” and create incentives for future evasion: businesses may simply wait for the next amnesty rather than comply with the law.
Ultimately, the risks associated with Albania’s fiscal peace package extend beyond domestic fiscal management. At stake is the credibility of the country’s anti-corruption efforts, the resilience of its financial system, and its ability to advance toward EU membership. Without full transparency regarding beneficiaries, rigorous verification of the origin of assets, and strong safeguards against criminal infiltration, the initiative could deepen perceptions that the rule of law is negotiable and that evasion pays better than compliance.
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