Analysis of VAT (Value Added Tax) reimbursement in Albania

• Author: Enver Sele - Ilirjana Gjergji
• Position: Tax administration of Kosovo
• Pages: 135-142

135

Vol. 4 No.2

September 2018

Balkan Journal of Interdisciplinary Research

IIPCCL Publishing, Graz-Austria

ISSN 2410-759X

Acces online at www.iipccl.org

Analysis of VAT (Value Added Tax) reimbursement in Albania

PhD (C.) Enver Sele

Tax administration of Kosovo

MSc. Ilirjana Gjergji

Abstract

VAT reimbursement is a topic that authors have paid great importance. This paper aims to

analyze the infl uence of economic openness and growth in the level of VAT reimbursement.

The necessary data for this work are taken from The Statistics Institute of Albania (Instat)

reports and The Ministry of Finance, which are processed for the targeted analysis. The

period covered for the study includes the 2007-2017 time series. From the conducted analysis

for the period 2007-2017 for Albania, was concluded that the economic openness a ects the

reimbursement of VAT. Whilst the change of real GDP according to the developed model

resulted in a negative relevance and it does not a etc the VAT reimbursement. In the fi rst case

with two variables, the economic openness variable was important at the level 5%, while in the

improved model the variable resulted statistically signifi cant at the level 1%. The short period

of study is a constraint for this paper. The results of this study can be used as a comparison

basis for other places of how these determinants infl uence their economy and for Albania as

well in its later periods.

1. Preface

VAT reimbursement is a highly discussed topic for the e ects it brings. (Keen &

Smith, 2007:7) claim that the reimbursement mechanism stands in the centre of VAT.

It is thought that is crucial to study and to analyse the determinants that infl uence

the functioning scheme of value added taxation, since this scheme is very important

for analysts and fi nanciers. In this study are considered only two variables: economic

openness indicator and real GDP inidicator.Taxable persons for the completion of

their aconomis acticity make purchases and di erent supplies, some of which can be

with VAT. Reimbursement scheme is really a ected from tax evasion. (Terzić, 2017:57)

concludes that the factors of tax norms, fi nes, tax morality and taxpayers culture are

of great importance in the e ects of tax evasion.

(Tait 1988:307)1 reports se 44% of all the VAT frauds in Netherlands is from the

fake requests for the paid VAT in the previous periods by represting forged bills

for the non-existent purchases or exaggerated. Accoding to the o cial data of Tax

Department for the year 2017 the total concluded damage due to the misleading

schemes is 6.2 miliard ALL that are missing in the state budget. Because of this amount

1.3 miliard ALL is the damage coming from creating fi ctitious schemes for obtaining

VAT reimbursement2. The multidimensional interaction of VAT reimbursement was

a reason for undertaking this study to see how di erent VAT refunders of a certain

economy are infl uenced by di erent determinants.

1 Taken from: Keen M., & Smith S. (2007) “VAT Fraud and Evasion: What Do we Know, and what can be

done?”,Working Paper WP/07/31, International Monetary Fund, Washington, DC.

Available: https://www.imf.org/external/pubs/ft/wp/2007/wp0731.pdf, p. 9.