On 23 October 2026, the Albanian Ministry of Finance published the preliminary consolidated fiscal performance report covering the first nine months of 2026 (January–September). The release fulfills the statutory reporting requirements under Article 22 of the Organic Budget Law (Law No. 9936/2008) and the Law on Financial Management and Control, which mandate quarterly updates on budget execution to ensure fiscal transparency and parliamentary oversight. The report aggregates data from the General Directorate of Taxation, the General Directorate of Customs, and the Treasury, presenting a unified view of central government and social security fund operations. Total revenues for the period reached approximately ALL 626.6 billion, marking a nominal year-on-year increase of 7.3% and reflecting the combined impact of economic recovery, enhanced tax compliance measures, and one-off non-tax receipts. Expenditure execution stood at ALL 712.4 billion, yielding a preliminary cash deficit of ALL 85.8 billion, which is consistent with the seasonal pattern of front-loaded capital spending and the approved annual deficit ceiling of 3.5% of GDP.
Key Takeaways
- Revenue Collection Momentum Driven by VAT and Corporate Tax: The preliminary data indicates that tax revenues grew by 8.1% year-on-year, with value-added tax (VAT) collections rising 9.4% due to stronger domestic consumption and the full-year effect of the reduced VAT rate on tourism services introduced in 2025. Corporate income tax receipts surged 12.6%, supported by higher profitability in the energy and construction sectors and the successful conclusion of the large taxpayer audit program completed in June 2026. Customs duties increased modestly by 3.2%, reflecting the gradual phase-in of the EU-Albania Stabilisation and Association Agreement tariff reductions. Non-tax revenues, including dividends from state-owned enterprises and concession fees, contributed ALL 42.1 billion, slightly below target due to delayed dividend payments from the energy distributor OSHEE.
- Expenditure Execution Aligned with Strategic Priorities: Current expenditure categories remained within programmed limits, with wage bill growth contained at 4.5% following the public sector wage agreement signed in March 2026. Social transfers and subsidies tracked closely to forecasts, while interest payments benefited from lower-than-expected yields on domestic treasury bills. Capital expenditure accelerated markedly in the third quarter, reaching 68% of the annual allocation, driven by the ramp-up of EU-funded infrastructure projects under the Instrument for Pre-Accession Assistance (IPA III) and the commencement of the Tirana-Durrës railway modernization. The Ministry emphasized that the expenditure mix continues to prioritize investment over consumption, in line with the Medium-Term Budget Program 2026–2028.
- Outlook and Policy Measures to Secure Year-End Targets: The Ministry projects that full-year revenue will meet the revised budget estimate of ALL 845 billion, provided that fourth-quarter collections maintain the current trajectory. To mitigate risks from potential economic slowdown in key trading partners, the Tax Administration will intensify compliance efforts, including the mandatory adoption of e-invoicing for all large taxpayers (annual turnover above ALL 100 million) effective 1 January 2027, and the expansion of the real-time transaction reporting system to the retail sector. On the expenditure side, the Government has activated a contingency reserve of ALL 15 billion to address unforeseen spending pressures, while maintaining commitment to the fiscal rule that limits the structural deficit to 1.5% of potential GDP. The final audited fiscal accounts for 2026 are scheduled for publication by 31 March 2027.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement