Comparative analysis of Tax Revenues and GDP by Albanian regions

This analysis aims to assess the ratio between tax revenues and GDP for each county in Albania, identifying opportunities to increase tax productivity and diversify revenue sources to enhance the country’s economic and financial system.

To conduct a detailed comparative analysis for each county, using the data on tax revenues and GDP for 2024 (based on preliminary indicators), we will analyze the percentage of tax revenues in relation to the GDP for each county and highlight differences and opportunities for improvement in tax productivity.

Tax Revenues for 2024 by Regional Tax Directorates (RTDs)

Tax Directorate (RTD)	Gross Total Revenue (000 ALL)	Plan (000 ALL)	% Realized	Social Insurance (000 ALL)	Plan (000 ALL)	% Realized
Berat	4,945,710	4,775,000	3.58%	3,157,712	3,080,000	2.52%
Dibër	4,971,863	4,820,000	3.15%	2,817,837	2,730,000	3.22%
Durrës	23,450,934	22,790,000	2.90%	13,140,060	13,050,000	0.69%
Elbasan	10,201,140	9,898,000	3.06%	6,275,320	6,250,000	0.41%
Fier	12,344,496	12,075,000	2.23%	7,288,045	7,300,000	-0.16%
Gjirokastër	3,977,797	3,738,000	6.42%	2,486,351	2,400,000	3.60%
Korçë	8,136,175	7,837,000	3.82%	5,129,595	5,050,000	1.58%
Kukës	3,016,973	2,794,600	7.96%	1,838,866	1,760,000	4.48%
Lezhë	5,271,531	5,068,500	4.01%	3,374,412	3,310,000	1.95%
Sarandë	3,546,509	3,184,800	11.36%	1,928,168	1,780,000	8.32%
Shkodër	8,809,266	8,608,000	2.34%	5,706,179	5,700,000	0.11%
Tiranë	154,817,677	153,669,031	0.75%	61,132,650	60,098,000	1.72%
DTM	153,565,100	152,892,118	0.44%	36,592,740	36,200,000	1.08%
Vlorë	8,592,730	8,394,000	2.37%	5,002,881	4,950,000	1.07%
Total	405,647,901	400,544,049	1.27%	155,870,816	153,658,000	1.44%

Comparative Analysis by County

1. Dibër

• Gross tax revenues = ALL 4,945.71 million
• GDP for 2024 = ALL 71,839 million
• Share of GDP represented by tax revenues = 6.88%

Dibër has a moderate percentage of tax revenues relative to GDP, indicating an effective tax administration for a smaller economy. However, there is potential to expand the taxpayer base to maximize economic growth opportunities and diversify GDP sources, particularly by promoting new sectors that can generate higher income.

👉 Focus on developing new industries and increasing economic formalization would contribute to higher tax revenues.

2. Durrës

• Gross tax revenues = ALL 23,450.93 million
• GDP for 2024 = ALL 250,913 million
• Share of GDP represented by tax revenues = 9.35%

Durrës shows a significant share of tax revenues, suggesting an efficient tax administration in a larger, diversified economy. However, there may be room to improve tax collection from small businesses and the informal sector, which remain underformalized.

👉 Improving tax collection from the informal sector and enhancing small business taxation could increase revenue potential.

3. Kukës

• Gross tax revenues = ALL 3,016.97 million
• GDP for 2024 = ALL 38,979 million
• Share of GDP represented by tax revenues = 7.73%

Kukës has a relatively high tax revenue-to-GDP ratio for a small economy. This indicates a strong tax administration, but also room for GDP growth and revenue diversification. Economic activity remains limited, and support for potential sectors could be beneficial.

👉 Investing in new sectors and identifying investment opportunities would help raise tax productivity.

4. Lezhë

• Gross tax revenues = ALL 5,271.53 million
• GDP for 2024 = ALL 73,696 million
• Share of GDP represented by tax revenues = 7.15%

Lezhë has a moderate tax revenue share, suggesting opportunities to improve tax collection and GDP growth. Diversifying economic activities and investing in new sectors can create potential for higher tax revenues.

👉 Encouraging new businesses and economic diversification strategies can boost tax revenue.

5. Shkodër

• Gross tax revenues = ALL 8,809.27 million
• GDP for 2024 = ALL 122,495 million
• Share of GDP represented by tax revenues = 7.19%

Shkodër presents a moderate tax revenue percentage against GDP. There are opportunities for improvements, especially in new and vulnerable sectors that could contribute more to the budget.

👉 Promoting high-potential sectors and diversifying economic activities would increase tax revenues.

6. Elbasan

• Gross tax revenues = ALL 10,201.14 million
• GDP for 2024 = ALL 167,987 million
• Share of GDP represented by tax revenues = 6.07%

Elbasan reflects moderate tax revenues, pointing to an effective tax administration. However, the low ratio indicates significant room for improvement, particularly in collecting taxes from the informal sector and diversifying the economy.

👉 Targeting underformalized sectors can significantly increase tax revenues in this region.

7. Tirana (includes revenues from the General Directorate of Large Taxpayers – DTM)

• Gross tax revenues = ALL 308,382.78 million
• GDP for 2024 = ALL 1,090,097 million
• Share of GDP represented by tax revenues = 28.30%

Tirana, with the highest GDP, shows a substantial tax revenue share, reflecting an efficient tax administration in a strong, diversified economy. However, its percentage is lower than some smaller regions, indicating potential to improve tax collection efficiency—especially from small businesses and informal activities. The presence of the DTM, which collects taxes from large companies registered in Tirana but operating nationally, inflates Tirana’s revenue by at least 12%.

👉 Despite appearing efficient, Tirana needs better tax administration mechanisms to integrate currently unregistered or non-compliant businesses.

8. Berat

• Gross tax revenues = ALL 4,945.71 million
• GDP for 2024 = ALL 83,569 million
• Share of GDP represented by tax revenues = 5.91%

Berat shows a low tax revenue ratio, indicating ample room for improvement in tax collection and economic diversification. Supporting the development of new sectors and promoting investments could increase GDP and tax revenues.

👉 Focusing on potential sectors and creating investment-friendly conditions would raise tax revenue opportunities.

9. Fier

• Gross tax revenues = ALL 12,344.50 million
• GDP for 2024 = ALL 271,027 million
• Share of GDP represented by tax revenues = 4.55%

Fier has a low tax revenue percentage, suggesting large potential for improvement in tax collection and economic diversification. The small and informal business sector is critical and requires more support to contribute effectively to public finances.

👉 Developing unformalized sectors and supporting small businesses would enhance tax collection.

10. Gjirokastër

• Gross tax revenues = ALL 3,977.80 million
• GDP for 2024 = ALL 52,026 million
• Share of GDP represented by tax revenues = 7.64%

Gjirokastër shows a healthy tax revenue ratio, indicating an efficient tax administration. However, opportunities exist to expand the taxpayer base and diversify GDP sources to boost tax productivity.

👉 Diversifying economic sources and increasing the number of taxpayers can improve tax revenues.

11. Korçë

• Gross tax revenues = ALL 8,136.18 million
• GDP for 2024 = ALL 129,847 million
• Share of GDP represented by tax revenues = 6.27%

Korçë has a moderate tax revenue percentage. Despite having an effective tax administration, there are opportunities to diversify economic activities and improve tax productivity.

👉 Developing new sectors and broadening the economic base would increase tax collection efficiency.

12. Vlorë (including tax revenues from Saranda)

• Gross tax revenues = 12,139.24 million ALL
• GDP for 2024 = 141,735 million ALL
• Share of GDP represented by tax revenues = 8.57%

Vlorë exhibits a high ratio of tax revenues to GDP, indicating an efficient tax administration. However, there remains potential to diversify economic activities and improve tax collection.

Emphasizing new economic sectors and enhancing tax collection from small businesses can significantly contribute to increased tax revenues.

In 2024, Albania experienced a significant tourism influx, with 11.7 million visitors generating up to €4.8 billion in the economy. This created substantial opportunities to improve tax revenues, particularly in coastal regions such as Shkodra, Lezha, Durrës, Vlorë, and Tirana. These regions, which are vital to tourism and economic activity, have strong potential to increase revenues from social contributions and VAT. However, they also face challenges related to tax administration and the diversification of revenue sources.

📊 Tax-GDP analysis: When analyzing tax revenues and GDP by region, coastal areas show considerable growth potential, considering the number of visitors and the economic activity that can be generated. Nevertheless, there is still significant untapped potential to improve tax collection from the informal sector and small businesses.

🚧 Administrative and structural needs: Regions such as Shkodra, Lezha, Durrës, and Vlorë require a more robust tax administration and support for the diversification of economic activities. To fully exploit the opportunities offered by the tourism sector, these regions can benefit from increased formalization of the economy and tax collection from unregistered businesses or those operating in informal sectors. This would contribute to higher state revenues and strengthen the country’s financial system.

🏙️ Tirana’s perspective: In Tirana, with its high GDP and relatively efficient tax administration, there is room for increasing tax collection from small businesses and sectors still outside the formal system. This presents a major opportunity to boost revenues from social contributions and VAT by integrating more businesses and individuals into the tax system.