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2025, budget revenues reach 28.5% of GDP, a modest expansion of 0.3%

2026-04-27 22:44:23, Ekonomi CNA

Budget revenues in relation to Gross Domestic Product recorded a modest increase in 2025, reaching 28.5% of GDP, up from 28.2% in 2024, according to official data from the Ministry of Finance.

Over the past year, the share of total income in relation to the economy expanded by 0.3 percentage points, but Albania still remains well below the regional and EU average for this indicator.

In tax revenues, the increase is even more pronounced than that of the budget total. This indicator increased by 0.8 percentage points, moving from 26.2% in 2024 to 27.0% of GDP in 2025.

Historical data show a highly volatile performance of Albanian public finances over the last three decades. The turnaround became more evident in the early 2000s, when the share of revenue in the economy stabilized above the 25% threshold, reflecting the strengthening of institutions and the formalization of the economy after successive transition crises.

The increase in tax revenues by 0.8 percentage points within a year indicates a specific dynamic that goes beyond the natural growth of the economy. The strongest role in the increase in additional revenues last year was played by the increase in salaries in both the private and public sectors. According to official data from the Ministry of Finance, the additional revenues last year came from payroll taxes.

Albania has also experienced a high influx of tourists, which has increased domestic demand for services. This has increased revenues from indirect taxes (such as VAT and excise duties).

Despite progress, our country remains the last in the Region and the EU in terms of revenue collection. In relation to its Western Balkan neighbors, Albania is positioned below the regional average, where countries like Serbia and Montenegro manage to collect over 38% to 42% of GDP in the state treasury. This gap with its neighbors shows that the Albanian economy still suffers from a higher level of informality and a narrower tax base.

The gap compared to the European Union is becoming even more pronounced. The average of EU countries for budget revenues fluctuated around 49% of GDP in 2024 according to data from Eurostat, where countries with a developed social model such as France or the Scandinavian countries often exceed 50% of GDP. Albania, with only 28.5%, collects almost 17 percentage points less than the European average./Monitor.al