Methodology – ALTAX Fiscality Index

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The ALTAX Index of Fiscality (IAF) is an annual/monthly composite indicator that synthesizes three main dimensions of the fiscal system, making them understandable and relatable to the everyday reader or professional analyst:

  • Fiscal pressure, how burdensome the fiscal system is on individuals and businesses, capturing the perceived and real burden of taxes, controls and administrative costs, a monthly “fever temperature” that can rise quickly from legal changes or budget deviations.
  • Fiscal sustainability, how stable and reliable the system is to ensure long-term public finances, assessing revenue stability, debt management and resilience to crises, an annual “support structure” that prevents collapse.
  • Efficiency and fairness, how effective and fair tax policies are, minimizing evasion, compliance costs and inequality in burden distribution, a “fairness filter” that ensures that pressure does not turn into injustice.

By integrating the IMPF (which focuses on monthly dynamic pressure) and the IVQF (which measures annual strategic sustainability), the IAF creates a holistic picture, where high monthly pressure can weaken annual sustainability if not balanced by efficiency.

This alignment allows the reader to see how an increase in fines in January (from the IMPF) can affect public debt at the end of the year (from the IVQF), making the index a complete story of fiscal balance.

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Description

The IAF aims to go beyond traditional static measures (such as the tax/GDP ratio), by providing an integrated, rapid and accessible assessment of real fiscality. The main objectives, related to its components, are:

  • Measuring the level of real fiscality, not just nominal tax rates, but the true burden, by integrating perceptions by businesses (from the IMPF) with macroeconomic stability (from the IVQF).
  • Signaling pressure on businesses and individuals, identifying periods of high pressure (e.g., the beginning of the year) to prevent evasion or dissatisfaction, promoting softer policies.
  • Assessing the effectiveness of policies and stability, to assess how well tax policies minimize costs and maximize fairness, signaling long-term risks such as debt growth.
  • Enable historical and international comparisons and allow for inter-annual (e.g., 2025 vs. 2026) or regional (with Croatia or Greece) analysis, positioning Albania in the European context.

Essentially, the IAF is a tool for transparency and accountability, helping policymakers, businesses and citizens understand how today’s pressures build or weaken tomorrow’s resilience.

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