Nov 4, 2020

Challenges Related to Strengthening Domestic Resource Mobilization: Case of Albania

After the adoption of the Addis Ababa Action Plan for Financing for Development, Domestic Revenue Mobilization (DRM) has been recognized as central for sustainable growth, poverty reduction, and provision of public goods needed to achieve the Sustainable Development Goals. During our recent online course, we discussed how the concept of DRM fits into the macro picture of public finances. We also addressed the existing challenges, the availability of information, and the need to improve cooperation between government bodies to ensure country commitment for mobilizing domestic revenues. Having a professional interest in fiscal and monetary policies and being involved in conducting research in support of economic growth at the Ministry of Finance and Economy in Albania, Mr. Juli Lubonja found this course very useful for his work. We are happy to share her reflections on why that was the case.

“The need for DRM has now taken on greater urgency, given the fiscal implications of the COVID-19 crisis. Greater revenue generation and improved tax administration have become increasingly central to the development agenda for my country.

Taking into consideration the importance of DRM, especially in times of high uncertainty, I decided to attend this online course on Fostering Domestic Revenue Mobilization (DRM) through Cooperation, delivered by the CEF in collaboration with the OECD and the Dutch Ministry of Finance.

The online course was well organized and in an innovative and flexible format, engaging the lecturers and participants in active discussions and exchange of country-specific experiences. After the webinar, we also had an opportunity to attend a follow-up meeting with our experts to voice our questions and clarify any potential misunderstandings.

The training course was divided into three thematic sections. Section 1 focused on the macro picture of public finances and the specifics of South-East Europe. Section 2 gave an insight into the OECD’s initiative and international cooperation within the DRM framework. Lastly, I had the opportunity to participate in a knowledge-sharing session about revenue mobilization in the Netherlands, including a discussion on a better-informed government, tax return analytics, and risk models.

This online learning course exceeded all my expectations, and I would like to conclude with some challenges that we would need to address in my country when raising domestic revenues:

  • Ensuring robust and transparent systems to capture, manage and distribute domestic resources fairly
  • Growing the tax base to foster sustainability and strengthen state-society relations
  • Over-generous tax exemptions awarded to large enterprises often deprive the state of potential revenues that could be used to fund their most pressing needs, which has undermined citizens’ tax morale and confidence in the state
  • Weak technical and institutional capacity is related to tax evasion and avoidance, capital flight, and criminal activities – with disastrous effects far beyond lost revenues

Thanks to the CEF, I had a chance to get updated with modern theories and visions, as well as to expand my network with colleagues from the region and beyond.”