Fiscal favors on the Eve of Elections: How Tax Amnesties have eroded fiscal morality in Albania?

For more than a decade, Albania has developed a permanent and deeply harmful tradition: the use of tax amnesties and pardons as pre-election “favors,” transforming them from extraordinary political instruments into clientelist tools for short-term gain.
Before we begin our analysis, let’s look chronologically at the tax amnesties/pardons over the past 16 years, from 2009 to 2024.

Tax Amnesties and forgiveness 2009–2024

When “Forgiveness” becomes the rule and not the exception
From 2009 to 2024, Albania has undertaken at least six measures of an amnesty or pardon nature, which without exception occurred during periods coinciding with local or parliamentary elections. In 2009, while the country was heading to the polls, undeclared capital legalization was proposed. In 2011 and 2014, fines and old obligations were forgiven, followed in 2019 by energy debt pardons. In 2021 and again in 2023–2024, the government revived the tax amnesty draft — even as warnings from the IMF, EU, and MONEYVAL were louder than ever.

The link with Electoral Cycles

As seen, there is no meaningful instance of major amnesties or pardons that does not coincide with an election period, which confirms suspicions about the real intent of these measures. This pattern is not a coincidence, but a repeated electoral strategy where the state uses fiscal policy as a tool to buy tolerance — instead of building discipline.

Comparison with regional countries
The comparative table below presents a clear overview of diverging fiscal approaches in the Western Balkans, particularly regarding the use and abuse of tax amnesties and pardons. It serves as a mirror in which Albania appears as an extreme case of the “fiscal favor cycle” and stands out for the frequency, motives, and high risk of its amnesty policies, especially compared to its neighbors.

The numbers speak for themselves:

• Over 5 amnesty- or pardon-like measures, occurring regularly every 2–3 years, with near-perfect alignment with election cycles. This places Albania at the top for political and opportunistic use of fiscal policy, to the detriment of systemic coherence. This “cyclical tendency” clearly illustrates the normalization of amnesty as an electoral instrument, leading to: • Selective tax compliance, where the law is perceived as negotiable.
  • Corruption of fiscal morality, where honest taxpayers are punished and violators are rewarded.

The table reveals a key distinction between the forgiveness of fines or tax debts (cases of Kosovo, Bosnia) and wealth amnesties aimed at legalizing undeclared capital (Albania, Serbia). This distinction is essential for understanding the real risk to the integrity of the fiscal and financial system.

Albania and Serbia have used amnesties more frequently as politicized instruments, with high risks of moral hazard and money laundering.
Kosovo and Bosnia have taken more conservative approaches, focusing clearly on fiscal rehabilitation and debt management.
Countries that have maintained a cautious pace and sound economic or health-based rationale for pardons (such as Kosovo during COVID-19) show less erosion of public trust. Conversely, in Albania and Serbia, repeated use of amnesties has created unfair expectations and undermined the principle of equality before the law.

On the other hand, only Albania and Serbia face a high risk of money laundering, receiving repeated criticism from the IMF, EU, and MONEYVAL. In Albania’s case, this is directly linked to the lack of verification of wealth sources and a recent tax amnesty draft law that does not meet standards of transparency, due diligence, and international cooperation.

In contrast, Kosovo and Bosnia have a more conservative and fiscally rehabilitative orientation, not focused on legalizing illicit wealth, which is reflected in the softer stance of international actors.

This table should be read as an indicator of fiscal maturity and institutional seriousness. In this analysis, Albania’s issue is not only the number of pardon measures — but the motives, method of implementation, and political timing of intervention. Therefore, any discussion of a new amnesty must begin with this question: is the measure serving the system or merely another electoral cycle?

Tax Amnesties and forgivenesses in the Region, 2009–2024

Who is theforgiveness for? Not for the honest taxpayers
In theory, an amnesty is a radical tool for extraordinary situations. In Albanian practice, it has become a political calculation, where the beneficiaries are precisely those who have not respected tax law, while the losers are those who have regularly contributed to the budget. When someone who has hidden wealth, undeclared income, or unpaid taxes for years is legalized without penalty — while a citizen or small business that has paid monthly is penalized with delays or fines — where is the justice?

This is the greatest harm: the destruction of tax morale and, along with it, citizens’ trust in the state.

A state that regulates through “settlements”
Instead of building credible fiscal and tax systems, Albania has cultivated a model that resembles governance by “settlements” rather than by rules. Fiscal policies have become tools to collect votes, appease clients, or “fix” inherited debts stemming from a lack of enforcement will.

These measures have neither cost-benefit analysis nor control over the source of wealth being legalized. This, in itself, not only contradicts the fundamental EU principles of sound fiscal governance but also opens high-risk channels for money laundering and fiscal deformation.