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Is evasion increasing?/ The government is collecting less income from economic growth

2024-10-07 07:37:06, Ekonomi CNA
Is evasion increasing?/ The government is collecting less income from economic
Illustrative photo, taken from Google

The economy of the country is moving faster than the forecasts in recent years, but the collection of taxes and taxes on the Gross Domestic Product is decreasing.

The latest INSTAT data regarding the new results of the Gross Domestic Product show that from 2018 to 2023, taxes and levies collected on GDP have declined (taxes on products are taxes payable per unit of some goods and services such as: Value Added Tax (VAT), excise duty and customs tax on imports. These taxes do not include taxes on wages and social security).

In 2018, GDP in value reached 1.6 trillion ALL, while taxes on this production were 253 million ALL, or 15.7% of it.

In 2023, GDP reached over 2.3 trillion ALL, while taxes on it reached 337 billion ALL or 14.22% of production. The percentage of taxes collected against production in 2023 decreased by 1 percentage point compared to 2018.

During 2018-2023, the best year was 2021, where it taxed 16.03% of the value of production, while the weakest year was 2020, when only 13.4% of GDP was taxed.

Is evasion increasing?/ The government is collecting less income from economic
Source: INSTAT

The tax-to-GDP ratio is a measure of a country's tax revenue relative to the size of its economy, as measured by Gross Domestic Product (GDP). This ratio enables the efficiency of the general direction of the tax policy of a country.

Developed countries typically have higher tax-to-GDP ratios than developing countries. Higher tax revenue means a country can spend more on improving infrastructure, health and education, all of which are key to the long-term prospects for a country's economy and its people.

Tax revenues above 15% of a country's GDP are a key ingredient for economic growth and poverty reduction, according to the World Bank.

The United States' tax-to-GDP ratio was 27.7% in 2022, while the European Union's tax-to-GDP ratio was 26.7% in 2022.

The tax-to-GDP ratio measures a country's tax revenue relative to its gross domestic product. It shows how much of the gross domestic product of a country goes to finance the government./ Monitor.al





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