Beyond recurrence — Is 2025 a structural break or tactical replay?

Albania’s 2024 anti-informality campaign marks the fourth major attempt in a decade (following 2015, 2018, and 2021). While the discourse is familiar—promoting tax compliance, reducing wage evasion, and curbing informality—the infrastructure, international context, and strategic intent have evolved. The question is no longer whether this campaign is “new,” but whether it constitutes a structural shift in governance practice or merely an electoral recalibration.

Institutional maturity vs. Electoral opportunism

Comparison across campaign cycles

Key distinction in 2024
Unlike past efforts, the current approach leverages state capacity through digital tools—particularly real-time monitoring and cross-platform data integration. However, technical sophistication does not equate institutional maturity. Previous failures have shown that:

• Policy durability requires insulation from short-term political cycles.
• Enforcement legitimacy depends on trust in state fairness—an area still fragile in Albania.

Unless sustained post-election, 2024 may again suffer from the “announcement-implementation gap.”

Digitalization as a tool, not a cure

The government’s flagship advancement is the digital tax system, notably e-filing, e-invoicing, and wage data cross-verification with social security. This shift, inspired by EU models like Croatia and Estonia, offers several technical benefits:

• 📊 Real-time monitoring: Allows early detection of underreporting.
• 🧾 Reduction of discretionary power: Minimizes room for corrupt tax inspections.
• 💡 Ease of compliance: Online services can reduce bureaucratic friction.

However, critics rightly note that digitalization can enhance inefficiency if the underlying system remains politicized or corrupt. Without:

• 👥 Independent audit institutions,
• 🔎 Real sanction mechanisms,
• 🤝 Business-state trust,

the risk is that digitalization simply automates dysfunction.

Digital tools can enhance transparency only if embedded in a culture of rule-based governance.

The political economy of wage formalization

The focus on wage evasion is analytically sound—since wages form the backbone of personal taxation and social protection systems. Yet implementation friction remains high, especially among SMEs.

Structural obstacles:

• 🧮 Tax wedge: High social contributions discourage formal hiring.
• 🏛️ State legitimacy: Businesses resist taxes when public services are poor.
• 🧱 Sectoral informality: Construction, hospitality, and retail operate with cultural norms of cash payment.

More critically, political resistance to full enforcement remains a known constraint. Firms embedded in political networks may continue to enjoy immunity, eroding the campaign’s credibility.

Without progressive tax reform and visible crackdown on elite evaders, SMEs will see the campaign as selective enforcement, not systemic fairness.

EU conditionality as a double-edged incentive

EU integration provides external accountability for reforms. The 2024 campaign clearly aligns with:

• 🇪🇺 EU Progress Reports emphasizing anti-informality,
• 📘 OECD best practices in digital tax governance.

This has dual effects:

• ✅ Positive pressure: Incentivizes reforms with long-term strategic value.
• ⚠️ Reactive policy design: Risk of form over function—reforms crafted to satisfy Brussels rather than solve domestic dysfunctions.

Moreover, as long as EU conditionality substitutes for local political will, reforms may remain technocratic exercises with shallow roots in society.

EU alignment improves standards but does not substitute for local consensus and ownership of reform.

Sustainability and Trust: The missing layer

Even if reforms are well-designed and technically executed, their sustainability hinges on public trust, which remains brittle. Key impediments:

• 🧮 Lack of tax transparency: Citizens don’t see how taxes translate into services.
• 🔄 Frequent policy changes: Businesses face uncertainty from shifting rules.
• 🛑 Corruption perception: Equal enforcement is still doubted by both citizens and firms.

Public surveys consistently show that trust in fiscal institutions in Albania is low, and this is the ultimate barometer of reform impact.

Formalization requires more than coercion—it demands social contracts based on reciprocity between state and citizen.

Final assessment: Reform at the crossroads

✳️ 2025 offers a critical window for transformative change. If anti-informality becomes a state-building mission rather than an electoral tactic, it could redefine Albania’s fiscal legitimacy. Otherwise, the campaign risks being another short-lived episode in the country’s cyclical governance playbook.