Feasibility and Budgetary Cost Analysis for the 2025 Fiscal Amnesty Package in Albania

In April 2025, the Prime Minister of the Albanian government announced a new fiscal amnesty package initiative that includes four main components:

• Agreed taxation on previously undeclared profit;
• Revision of financial statements with low penalties;
• Forgiveness of accumulated liabilities and interest;
• Voluntary participation by economic entities.

This analysis assesses their feasibility through the Feasibility Index (on a scale of 1–5), evaluating: clarity, historical background, implementation, cost, economic/social impact, and deadlines, detailed as follows:

🟩 Agreed Taxation on Profit

Agreement on 3-year average profit, 5% tax on the addition, payment in installments; no tax audits.

Average: 3.6/5 ✅
This measure is assessed as technically and legally feasible, but it requires post-implementation oversight to preserve market equality and avoid further distortion of fiscal justice.

🟨 Revision of Financial Statements

Review for the past 5 years with 5% penalty, no fines/interest, no audits.

Average: 3.4/5 ⚠️
This measure has implementation potential as a technical consolidation tool but requires clear standards for monitoring and justification of revisions.

🟥 Forgiveness of Liabilities and Interests

Full deletion for debts >10 years; discount for 1–10 years depending on payment method; forgiveness of fines and interest.

Average: 3.0/5 ⚠️
This is the most problematic pillar for fiscal morale and long-term benefit. Other instruments should be exhausted before applying it as policy.

Final Feasibility Index for the Package: 3.3 / 5

Summary of Budgetary Costs for All Three Pillars:

• Agreed taxation on profit: EUR 50,000,000
• Revision of financial statements: EUR 12,500,000
• Forgiveness of liabilities and interests: EUR 80,000,000

Total cost to the state for the three promises included in the “Fiscal Peace” package = EUR 142,500,000

Comment on the risk of Money Laundering

A significant concern related to this package is the risk of money laundering, especially in the context of financial statement revisions and forgiveness of liabilities and interests. This could provide opportunities for individuals or companies to launder money through financial statement revisions, justifying them as “natural changes,” or using the amnesties to clean unpaid debts that may have suspicious origins.

This risk requires special attention and strong standards for monitoring and verifying any suspicious activity, especially during the implementation phase of this package. Anti-money laundering mechanisms must be fully integrated into the process, and any suspicious case should be investigated by competent authorities to prevent abuse and preserve the legitimacy of this process.

Comment on conflict with the Electoral Code

A major concern related to this fiscal amnesty package is the possibility that it contradicts the Electoral Code, especially during the pre-election period in 2025. The Albanian Electoral Code prohibits manipulation of the fiscal system for electoral gains, providing sanctions for any form of abuse that could be used to influence voting.

This fiscal amnesty proposal could be interpreted as an attempt to gain electoral support by offering tax forgiveness to groups with a history of tax evasion. Using this mechanism to “improve” the fiscal balances of citizens and selected entities on the eve of elections could create an ambiguous and uncertain environment that raises doubts about the potential impact of this proposal on the electoral process.

If the fiscal amnesty includes specific business categories or individuals who have large debts to the state and are closely tied to political actors, it may be interpreted as a form of direct assistance that affects perceptions of electoral fairness. This process could create the perception that fiscal policy is being used for narrow electoral benefits, ignoring the principles of equity and fairness in the electoral race.

To avoid this situation and preserve the integrity of the electoral process, it is essential that this proposal be implemented after the elections and ensure that fiscal aid is provided equally and without ties to political interests during the electoral period.

Addressing concerns for decision-makers and comments for the Pre-Election Period 2025

Before approving the 2025 fiscal amnesty package, it is essential for decision-makers to examine and address several important aspects that could directly affect fiscal stability and citizen trust.

To ensure fair and sustainable implementation of the fiscal amnesty package and avoid potential negative consequences, including abuses and possible violations of the Electoral Code, several key preventive measures can be taken. These measures should focus on protecting the integrity of the fiscal system and avoiding political manipulation:

Ensure Transparency and Independent Oversight

• Establish clear and open mechanisms for supervising the fiscal amnesty process, including publishing beneficiary data and detailed reporting on implementation.
• Create an independent monitoring committee to ensure the process follows rules and principles of fairness, free from external influences.

Exclude Political Use of the Fiscal Amnesty

• Make the measure effective by prohibiting fiscal amnesty for individuals or entities directly linked to the electoral period, to avoid the perception of electoral aid.
• Clearly exclude any fiscal benefit for entities under investigation or with a history of tax evasion.

Strict Rules to Prevent Money Laundering

• Define the implementation of strict standards for possible money laundering control, including the use of digital platforms to verify sources of income for individuals and businesses.
• Accompany this with a thorough audit procedure for every transaction cleared from tax obligations, aiming to protect against money laundering and the financing of illegal activities.

Post-Implementation Oversight

• Establish a mechanism to ensure long-term monitoring of all entities benefiting from the fiscal amnesty, to ensure future obligations are met and the fiscal system is not abused.
• In this context, create an independent committee to assess the long-term impact of the fiscal package on the country’s fiscal morale and justice, considering possible political and economic influences.

Fulfillment of Legal and Ethical Standards

• This point is of special importance, as all interest groups must ensure the fiscal amnesty is applied after the electoral period to avoid any interpretation as influence on election results.
• Given the failure of previous amnesties/fiscal pardons, it is necessary to define a clear timeframe for the amnesty’s eligibility so it does not overlap with sensitive electoral periods, to preserve trust in the electoral system and prevent the use of this policy to gain electoral support.

These measures will ensure a balance between fiscal aid and the integrity of the electoral process and the fiscal system in general.