TAX EVASION IN ALBANIA

Tax evasion is the illegal evasion of taxes by individuals, corporations and trusts. Tax evasion has a devastating effect on the fiscal policy of the state government, causing a significant loss in its fiscal income. It constitutes a serious obstacle to economic and social development, thus a lack of investment in important areas in the country. This creates a favourable climate for the development of financial crime, illegal trafficking, circulation of dirty money and the investment and money laundering, which encourages economic informality. Tax evasion is closely associated with the informal economy because we cannot talk regarding the economy without talking about illegal tax evasion, as the phenomenon of the fiscal evasion cannot be dealt without mentioning the illegal economy. Tax evasion should not be confused with tax avoidance. Tax avoidance implies the use of spaces that the tax system itself allows to achieve benefits by reducing the amount that should be paid, but by using tools defined as legal and stating all the information required by the relevant tax authorities. However like evasion, as well as avoidance, should be followed very carefully by the tax structure because both consequences are far too big for the economy.