Tax Policy Cannot Be Replaced by Political Communication

The public interest requires more than announcements of tax measures. Businesses and civil society experts call for transparency regarding the reasons behind decisions, the calculation of costs, consultation with affected groups, and accountability for results.

The issue raised by the proposed Fiscal Package 2027 is not limited to increases or reductions in certain taxes. It concerns a more fundamental question: how fiscal policy is developed in Albania and what role professional analysis, public consultation, and strategic documents play before decisions are communicated to the public.

Prime Minister Edi Rama’s communication on 28 October, following the presentation of an earlier version of the proposed tax changes by the Minister of Finance on 27 October 2026, makes this discussion even more important. Moving from one version to another within two days does not, in itself, prove that the process was flawed. Governments can revise their proposals. The problem arises when changes are not accompanied by a clear explanation of what has changed, why it has changed, and what data supports the revised approach.

In a sound policymaking system, the Albanian public should not merely be the recipient of decisions that have already been finalised. The business community, chambers of commerce, experts, professional organisations, and civil society should not be treated simply as parties to be informed after the policy direction has been determined. They represent important sources of information on costs, taxpayer behaviour, competition, employment, and effects that are not visible in budget revenue tables.

Consultation does not mean that the government must accept every business request. However, it must fulfil its legal obligation to consider proposals, respond to objections, and base the final decision on verifiable reasoning. When a chamber of commerce or business organisation submits arguments but receives no reasoned response, trust in the process is undermined and an opportunity to improve the quality of fiscal policy is lost.

From Fiscal Policy to the communication of measures

One of the main concerns is the sequence in which decisions are presented. The Prime Minister has the right to communicate the government’s priorities. However, political communication cannot replace an economic explanatory report, an assessment of budgetary impact, or an analysis of alternatives.

When changes are announced to VAT, corporate income tax, dividend tax, the VAT registration threshold, and vehicle taxation, the minimum expectation is an explanation of their combined effects. A tax reduction may deliver real benefits, but its cost and financing must also be clarified. A tax increase may be justified by the need for public revenue, but the government should demonstrate why that instrument is more appropriate than the available alternatives.

For example, if the turnover tax on fuel is abolished, the expected revenue loss and the revenue anticipated from new vehicle-related charges should be published. If the aim is to tax the digital economy, the relevant entities, tax base, rates, and expected revenue must be defined.

If additional taxes are proposed on vacant apartments, coastal villas, or luxury vehicles, the government should explain how the tax base will be determined and how unfair treatment of different categories of taxpayers will be avoided.

These are not technical details that can be postponed until later. They are part of the reasoning required to justify the measures themselves.

Is the narrow tax base being left unaddressed?

Albania needs a broader tax base, less informality, and more effective tax administration. However, broadening the tax base should not be equated with increasing the number of taxpayers subject to new obligations without assessing the costs and outcomes.

Reducing the VAT registration threshold, for example, may bring more businesses into the system. Nevertheless, the number of registered entities does not, by itself, show how much net revenue the budget will collect. Their actual turnover, VAT collected, input VAT credits, compliance costs, and the risk that small businesses may be discouraged or artificially split into separate entities must also be assessed.

The same logic applies to the fight against tax evasion. Before arguing that higher tax rates are necessary, the public should be informed about tax administration performance, the VAT gap, underreporting of wages and profits, and the revenue that could be generated through formalisation.

This raises a legitimate question for the Ministry of Finance: how much of the revenue potential envisaged in the revenue strategies has been achieved through better administration, and how much remains to be secured through changes in tax rates?

The absence of a progress report comparing actual results with the original targets has made fiscal policy less transparent. The public cannot determine whether the proposed changes reflect a new fiscal diagnosis or whether the most direct route to higher revenue is being chosen.

Strategic Documents must carry real weight

The Medium-Term Revenue Strategy, the macroeconomic and fiscal framework, the Medium-Term Budget Programme, and the fiscal calendar are not documents that should be mentioned only when they are drafted. They are intended to create predictability and explain the direction of public policy.

The government can change its priorities and propose new instruments. However, when a package significantly changes the composition of the tax burden, it should explain whether these changes were anticipated in existing documents, which assumptions have changed, and which objectives require a new approach.

If the strategy envisages broadening the tax base through formalisation and improved administration, while the new package relies more heavily on changes to rates and thresholds, this does not necessarily constitute a legal contradiction. It does, however, raise an important question about policy coherence that requires a public explanation.

The public interest is not served by preserving every previous objective regardless of changing circumstances. It is served by explaining why an objective or instrument has changed and by demonstrating the consequences of the new approach.

Role of the Ministry of Finance and the risk of predetermined decision-making

The way the Fiscal Package 2027 has been communicated also raises an institutional question: what is the relationship between political decision-making and the professional analysis that should support it?

The Ministry of Finance should ensure consistency between tax policy, projected revenue, the sustainability of public finances, and economic effects. For every significant measure, it should be able to explain the objective, the alternatives considered, the budgetary cost, and the expected impact.

However, when political communication precedes the publication of technical analyses and supporting documentation is not publicly available, the impression may arise that the decision was determined before the professional assessment was completed. This is a legitimate accountability concern, but it is not sufficient to prove that the Ministry acted solely to formalise a decision taken in advance.

Clarifying this issue requires dated versions of the draft legislation, accompanying explanatory reports, impact assessments, consultation documents, and explanations of the changes made between successive versions.

The demand for transparency should focus on this evidence rather than on speculation about motives. The central issue is how the process that produces fiscal decisions is documented.

What should be made public?

To move from political debate to a verifiable assessment, the Ministry of Finance should publish an integrated set of documents:

• A comparative table of Fiscal Package versions V1 and V2, explaining every change and the reasons behind it.
• An assessment of the budgetary impact of each measure, for 2027 and the medium-term period.
• An analysis of the effective tax burden on households and businesses, including the combined effects of VAT, corporate income tax, dividend tax, and other obligations.
• A public consultation report listing the proposals received, institutional responses, and changes made as a result of consultation.
• A progress report on the Medium-Term Revenue Strategy and the results of measures to combat informality.
• A comparison of fiscal alternatives, showing what could be achieved through improved tax administration, reduced evasion, and changes to tax rates.

These documents would not restrict the government’s authority to make decisions. On the contrary, they would make decision-making better substantiated and more defensible before the public.

Fiscal Package 2027 should be assessed both in terms of its economic substance and the process through which it is developed. Fiscal policy may contain reasonable measures yet lose credibility when their announcement is not accompanied by transparency, effective consultation, and an explanation of costs.

The government is not obliged to agree with everyone. However, it cannot avoid its obligation to justify its decisions. The Ministry of Finance should not be merely the institution that prepares legislative acts; it should also safeguard their economic rationale, strategic coherence, and transparency.

The value of fiscal packages should not be measured solely by the volume of revenue they collect, but also by the fairness with which the burden is distributed and the predictability they provide to the market.

A policy of this kind cannot be imposed as a closed decree. It must be developed through transparency, accountability, and genuine—not merely formal—dialogue with society.