Description

This technical assistance report assesses Albanian municipalities' own-source revenues with the view to continue strengthening revenues and improving unconditional and equalizing grants. Albania's intergovernmental finance system constrains municipal autonomy: revenues are low, fragmented, and reliant on volatile instruments, leaving municipalities transfer dependent. Tax assignments should align functions with revenues, favor stable immobile local bases, and retain mobile and redistributive taxes centrally. A reformed recurrent property tax should anchor the revenue mix, complemented by PIT surcharges, user charges, and property transfer duties. The transfer system needs reforms as it remains unbalanced, with inadequate equalizing and unconditional grants and excessive sectoral grants.

More publications in this series: High-Level Summary Technical Assistance Reports