8-month revenues increase, but their structure remains a challenge

Budget revenues reached 557.6 billion lek during the first eight months of 2026, achieving 100.1% of the plan and marking an increase of 58.5 billion lek, or 11.7%, compared to the same period last year. At first glance, this represents a strong performance of public revenues. In a more in-depth fiscal analysis, the structure of this growth and the economic source that is fueling it become important.

The growth of budget revenues is moving at a faster pace than the growth of collections from tax and customs administrations. The latter reached 356.5 billion lek, with an increase of 7.6% compared to a year earlier. Tax revenues of the tax administration increased by 10.5%, to 191.6 billion lek. The difference between the rates shows that the expansion of public revenues is supported by a combination of fiscal and economic factors, including revenues from special funds and other budget sources.

VAT remains one of the most significant indicators of this dynamic. Net VAT collected in the country reached 56.8 billion lek, with an increase of 24.2% and 11.1 billion lek more than in the first eight months of 2025. This rate is significantly above the overall growth of tax revenues.

VAT is directly linked to consumption and economic turnover. For this reason, its growth should be read together with the nominal development of the economy, prices, formalization and changes in the structure of consumption. An economy that produces more tax turnover through consumption generates rapid revenues for the budget, while fiscal sustainability requires continuous expansion of production capacities and the taxable base.

Another important signal comes from personal income tax. This item reached 65.5 billion lek, up 15.5% or 8.8 billion lek more than in the same period of 2025. This performance is related to the increase in declared income, wages and the formal employment base, creating a relatively more stable source for public finances.

In contrast, the profit tax reached 38.6 billion lek and realized 98.4% of the plan. This pace places the performance of corporate profits at a more moderate level compared to the pace of VAT and personal income tax. For the analysis of the fiscal structure, this differentiation is important because it shows that the increase in collections is focusing more on consumption and personal income than on the proportional expansion of the profit tax.

A particularly important part of this performance is related to construction. According to the data reported on the structure of growth, the infrastructure impact tax contributed about 30% of the additional revenues generated during the period. This places the construction cycle in an important position for public finances, beyond its impact on the local economy and municipal revenues.

This is a two-dimensional development. In the short term, the expansion of construction generates revenues through taxes, VAT, income tax, social security and urban development-related obligations. In the medium term, the high weight of real estate and construction exposes the fiscal base to the cycle of this sector. The greater the dependence of revenues on transactions and investments in real estate, the more important it becomes to diversify the sources of economic growth.

Customs revenues also provide a clear signal about the structure of the economy. The customs administration collected 165 billion lek, an increase of 4.4% compared to the previous year. VAT on imports increased by 4.2%, excise by 4.5%, while customs duties by 9.1%. The rates are significantly more moderate than the increase in VAT collected domestically.

In this configuration, the Albanian budget is benefiting from the expansion of economic activity and the taxable base, but a significant part of the growth is based on sectors and bases that have a cyclical character. Consumption, construction, real estate and the increase in personal income are contributing more to the increase in collections than a proportional expansion of income from business profits.

On the expenditure side, the difference becomes even more significant. Public spending reached 496 billion lek during the eight months, with an increase of 8.2% compared to a year earlier and a realization of 95.6% of the plan. This creates a difference of about 61.6 billion lek between revenues and expenditures for the period.

The expenditure structure shows that capital expenditure reached 56.7 billion lek, with an increase of 12.2% compared to the previous year, but with an implementation of 86.3% of the plan for the period. Meanwhile, current expenditure reached 439.3 billion lek, with an implementation of 97% of the plan and an increase of 7.7%.

Here one of the most important issues of fiscal management appears. The pace of collections is higher than the pace of expenditures, while within expenditures the pace of capital investment realization remains lower than that of current expenditures. For the economy, this means that the budget’s capacity to generate revenues is growing faster than the pace at which these resources are being transformed into public capital.

In an economy with high needs for infrastructure, productivity, education, health and human capital, the quality of spending becomes as important as the collection performance. Additional revenues take on full economic value when they are converted into investments and services that increase productivity, expand the business base and create new revenues for future budget cycles.

The performance of the first eight months of 2026 shows a public finance with a greater collection capacity, but also a revenue structure that requires attention in terms of sustainability. The increase of 11.7% is an important fiscal fact; its structure is the most valuable indicator for economic analysis.

Albania is collecting more revenue from the economy it has today. The challenge of the next phase is for tomorrow’s economy to produce a broader tax base, more productive and less exposed to the consumption and construction cycle.

In this sense, the fiscal performance of 2026 should be measured beyond the record of collections: by the quality of the tax base, the diversification of resources and the productivity of every lek that passes from the budget to the economy.