The Albanian Center for Development and Integration, representative of the Multi Stakeholder Group (MSG), join the Swiss Cooperation Strategy in Albania

The Albanian Center for Development and Integration, representative of the Multi Stakeholder Group (MSG), join the Swiss Cooperation Strategy in Albania

Over the months of August 2018-January 2019, the Albanian Center for Development and Integration conducted a monitoring project, to the municipalities with extractive industry activities, regarding the distribution of royalty on local level. The project was implemented in 5 municipalities, Patos, Roskovec, Ura Vajgurore, Bulqiza and Has supported by Movement Albania.

Throughout the project “the adequate use of 5% royalty to the benefit of the community and full transparency for the public”, a survey was conducted in 5 municipalities, with the involvement of  several hundred citizens from different social groups, over 40 meetings and interviews with Mayors, Tax and Finance Employees in the municipalities of Patos, Roskovec, Bulqize, Has, Ura Vajgurore, heads and employees of the General Directorate of Customs and Taxation, as well as the Regional Directorates of Taxes in Peshkopi, Kukës, Fier and Berat, EITI Board members, business representatives and civil society.

The project observed that there are long and bureaucratic procedures that hindering and increasing cost to collect the royalty for the municipalities that benefit it. There is an overflowing infrastructure, distributed to many national and local institutions, which has made it difficult to calculate the royalty, collection and its distribution according to the law.

Due to the lack of full knowledge of the law, municipalities did not carry out full procedures for the reconciliation of royalty figures collected by all central or regional institutions of customs or taxes.

The minimum length of the procedure is 4 months from the beginning of the reconciliations until the allocation of the royalty to the municipal budget.

5% royalty is not enough in relation to the damages that happens to the community from the use of natural resources.

Because the local self-government units have not exploited the legal instruments, and therefore have not been imposed or heard by the central government for their concerns about the difficulties and delays in calculating and collecting the part that belongs to royalty, the Albanian Center for Development and Integration suggests:

  1. Review of the legal framework and effective instruments findings to facilitate the process from a huge bureaucratic burden.   
  1. To consider the possibility of the royalty transfer, 95% for the state and 5% for the municipality at the initial moment when financial transactions of companies are made, during domestic sales to taxes or exports to customs.  
  1.  As it was until 2014, the Government should restitute 25% of the royalty to the local government units, while for the municipalities that receive small amounts of the royalties to be to 100%.  
  2. According to the EITI Standards where Albania has been a member since 2013, all municipalities must publish figures and inform their citizens about the royalties collected and projects invested by royalty funds.