{"id":22312,"date":"2025-06-04T14:23:27","date_gmt":"2025-06-04T12:23:27","guid":{"rendered":"https:\/\/altax.al\/?p=22312"},"modified":"2025-06-11T12:50:29","modified_gmt":"2025-06-11T10:50:29","slug":"why-do-only-a-few-albanians-declare-their-income-while-spending-like-the-rich","status":"publish","type":"post","link":"https:\/\/altax.al\/en\/why-do-only-a-few-albanians-declare-their-income-while-spending-like-the-rich\/","title":{"rendered":"Why do only a few Albanians declare their income, while spending like the rich?"},"content":{"rendered":"\n

In 2025, only 124 thousand individuals submitted the Individual Annual Income Declaration (DIVA) in Albania.<\/em><\/p>\n\n\n\n

This figure represents no more than 25\u201330%<\/strong> of individuals who have obligation based on the current law<\/strong> and especially on estimates for the active population<\/strong> with more than one source of income<\/strong> or who earn in 2024 above the threshold of 2 million ALL per year<\/strong>, should be part of this declaration process<\/strong>. The phenomenon is not only a statistical or technical issue<\/strong> \u2013 it speaks to a deep gap<\/strong> between the formal system<\/strong> and the economic reality<\/strong> experienced and manifested by citizens in their daily lives.<\/p>\n\n\n\n

This low level of participation<\/strong> in the declaration system clearly contrasts with individuals’ actual consumption behaviors<\/strong>. It seems as if there exists an Albania that is not reflected in data<\/strong>, but which is very visible on the streets<\/strong>, at the seaside<\/strong>, in shopping centers<\/strong>, through credit cards<\/strong>, and in daily life<\/strong> that does not match reported incomes<\/strong>.<\/p>\n\n\n\n

The real cost of living<\/strong> for a typical family with two adults and two children<\/strong> in major cities such as Tirana<\/strong>, Durr\u00ebs<\/strong>, or Vlor\u00eb<\/strong> is estimated to be between 120,000 and 170,000 ALL per month<\/strong>. This translates into over 1.4 to 2 million ALL per year per individual<\/strong>, if we consider their share in consumption.<\/p>\n\n\n\n

However, thousands of individuals<\/strong> who live according to this standard \u2013 and even exceed it \u2013 do not appear<\/strong> in the income declaration system<\/strong>.<\/p>\n\n\n\n

This is not just a fiscal anomaly<\/strong> but a direct challenge<\/strong> to the legitimacy and effectiveness<\/strong> of tax administration<\/strong> in the country.<\/p>\n\n\n\n

Visible luxury consumption<\/strong> is another aspect that highlights this mismatch.<\/p>\n\n\n\n

In 2025 alone<\/strong>, over 4,500 vehicles<\/strong> worth more than 30,000 euros<\/strong> have been imported, mostly under individual names<\/strong>, many of whom do not appear as income declarants<\/strong> or are recorded with minimal incomes<\/strong>.<\/p>\n\n\n\n

Likewise, there has been a significant increase<\/strong> in the number of real estate purchases<\/strong>, especially in coastal areas<\/strong> such as Dh\u00ebrmi<\/strong>, Lal\u00ebz<\/strong>, or Palas\u00eb<\/strong>, by individuals with no registered economic profile<\/strong>.<\/p>\n\n\n\n

Overseas travel<\/strong> has increased by more than 40%<\/strong> compared to the 2022\u20132023 period<\/strong>, according to data from tourism operators<\/strong>. Meanwhile, banks<\/strong> report an increased use of credit cards<\/strong> for monthly expenses exceeding 5,000 euros<\/strong> by individuals who do not declare sufficient income<\/strong> to justify these expenditures.<\/p>\n\n\n\n

Beneath this surface of a declared system<\/strong> with individuals reportedly earning less than 45 euros per day<\/strong> lies an informal economic reality<\/strong>, often financed by hidden income<\/strong>. The discrepancy between declared income and real spending power<\/strong> is not merely an occasional deviation<\/strong>, but a widespread phenomenon<\/strong> that deepens the gap between honest citizens<\/strong> and those who benefit from the system\u2019s weaknesses<\/strong>.<\/p>\n\n\n\n

At first glance, this mismatch highlights a problematic fiscal approach<\/strong>, where fictitious declarations and non-declarations<\/strong> remain the norm<\/strong> for a large portion of individuals.<\/p>\n\n\n\n

Furthermore, the institutional approach<\/strong> suffers from a lack of interaction and integration of data sources<\/strong>. Currently, the Tax Administration<\/strong> does not yet effectively cross-reference information<\/strong> from banks<\/strong>, the cadastre<\/strong>, customs<\/strong>, local taxes<\/strong>, and other public institutions<\/strong>.<\/p>\n\n\n\n

The lack of a unified register of wealth and income<\/strong> makes it impossible to create an accurate profile<\/strong> of individuals, thus hindering the automatic identification<\/strong> of unjustified assets<\/strong>.<\/p>\n\n\n\n

There exists a socio-economic approach<\/strong> that normalizes non-declaration<\/strong>.<\/p>\n\n\n\n

It is not perceived as a problem<\/strong> by the majority of society<\/strong>, especially when it comes to rent<\/strong>, remittances<\/strong>, or income from secondary activities<\/strong>.<\/p>\n\n\n\n

This \u201ctolerance norm towards informality\u201d<\/strong> is accompanied by an administration<\/strong> that is often passive<\/strong> toward individuals with a high economic profile<\/strong>, either due to a lack of technical capacity<\/strong> or because of political influence<\/strong>.<\/p>\n\n\n\n

The costs<\/strong> caused by this phenomenon are multidimensional and severe<\/strong> for the economy and society<\/strong>. Annual losses<\/strong> from non-declaration are estimated to exceed 8 to 10 billion ALL<\/strong> \u2013 an amount that, for illustration, could cover a significant salary increase<\/strong> in the health sector<\/strong>.<\/p>\n\n\n\n

Moreover, compliant taxpayers<\/strong> feel penalized<\/strong> by the tax inequality<\/strong> resulting from this unpunished informality<\/strong>. Without accurate data<\/strong> on real income<\/strong>, the formulation of targeted policies<\/strong> becomes almost impossible, whether for social support<\/strong>, credit policies<\/strong>, subsidies<\/strong>, or budget planning<\/strong>. The failure to identify unjustified assets<\/strong> seriously undermines the administration\u2019s capacity<\/strong> to combat corruption<\/strong> and money laundering<\/strong>.<\/p>\n\n\n\n

The way out of this situation requires deep and coordinated interventions<\/strong>:<\/p>\n\n\n\n