| The Albanian General Taxation Directorate | | | | Local Fiscal Authority organization structure. Tax |
| (AGDT) has more than 3 years that has been | | | | offices cannot follow taxpayers because of the |
| working on new inspection strategies, the core of | | | | large numbers of taxpayers. In addition, tax |
| which is to develop strategies by building an | | | | legislation is far too complex for the existing tax |
| adequate audit system. This makes it possible to | | | | office structure. Service training is not enough for |
| improve the idea of "taxation tools of economic | | | | government officials in the General Directorate of |
| policy". Economy is observed and carefully | | | | Revenues. Some of the most important problem |
| evaluated within the various sectors and | | | | addressed above illustrate that re-organization is |
| companies respectively. | | | | necessary in tax administration. |
| The structural perspective is constituted by | | | | 2. The Increase of Tax Inspection Effectiveness: |
| observation and evaluation of the acquired result. | | | | The mass of taxpayers is not a homogenous |
| Sector analysis provides one of the best | | | | mass and it must be segmented by several |
| evaluation tools. Economical variables are received | | | | different criteria such as; income taxpayers, |
| by the AGTD and policy alternatives and solutions | | | | corporate taxpayers, taxpayers active in the |
| are produced immediately. | | | | automotive sector, large companies, small and |
| Sector working system analysis is not only | | | | medium companies and taxpayers. Different levels |
| necessary in order to produce fiscal policy | | | | of the taxpayer segmentation base organize the |
| alternative, but also in order to acquire specialized | | | | tax inspection units in Albania. With this manner, |
| information from complicated companies. | | | | there is a pyramid structure in the TAD. This |
| Company inspections are complicated today | | | | structure is composed from small companies and |
| because of such influences as globalization, | | | | taxpayer inspection to large and complex |
| technological advancements, and legislation | | | | companies and taxpayer inspection. Other |
| developments. | | | | developed countries use this system. The TAD |
| The Tax Audit Directory (TAD) , that is part of | | | | directs the upper level government external |
| AGDT observes the improvements of inspection | | | | inspection. However, the increased effectiveness |
| strategies and adapts them to conditions in | | | | of tax inspection is dependent upon every unit's |
| Albania. These new strategies are also aimed in | | | | individual performance in their selective areas of |
| aiding tax administration transitions into the EU. | | | | activity. |
| Some of their requirements are mentioned in the | | | | The individual unit's performance and results should |
| moment of assignment of Stabilization Association | | | | be declared, evaluated with standardized criteria, |
| Agreement on June 12, 2006 and are summarized | | | | and responsibilities determined clearly for |
| below:o Revenue management's effectiveness | | | | inspection coordination control within the tax |
| should be strengthened.o External and internal | | | | inspection units. Therefore, increasing |
| inspections are too dispersed. This situation should | | | | effectiveness of tax inspections is dependent |
| be eliminated and increased effectiveness | | | | upon all the units as a total quality management |
| implemented.o External inspection should have | | | | system. |
| independent organization structure as often as | | | | The largest problem with this kind of a solution |
| possible.o The legislation and infrastructure | | | | are that, with the exception of the TAD |
| problems should be eliminated and inspection | | | | functioning as an individual unit, all units are |
| systems should be centrally planned.o The | | | | undertaking both external and internal inspections |
| authority and responsibility problems among | | | | at the same time and are responsible for their |
| inspection units should be eliminated with | | | | own inspections. These units are responsible from |
| centralization and the coordination among | | | | the same administrative personnel for all the |
| inspection units increased. | | | | investigative inspections from the AGTD. |
| These matters are both short-term and | | | | If the central planning, coordination, direction, and |
| long-term based basic goals of the AGDT. The | | | | strategic decision responsibilities are given to the |
| TAD's approach can be summarized in two main | | | | tax audit sections in tax offices, it will be possible |
| topics: | | | | to make all units a part of a whole system. |
| 1. The Increase of Effectiveness of Tax | | | | Currently, all units are working individually and using |
| Administration: | | | | different standards and measurement |
| The main cause of the decrease in effectiveness | | | | mechanisms, here are some possible solutions: |
| of Tax Administration is the structural weakness | | | | Tax inspection will be planned activity |
| of organization. All of the socio-economic | | | | with its systematic working and standards |
| approaches, which analyze the success factors of | | | | reorganized by district, local organizations and |
| associations, conclude "organizational performance | | | | centrality in order to make it possible for more |
| is created by the continual and mutual interaction | | | | efficient tax inspections by the use of planning |
| between human behaviors and structural factors | | | | and organizational techniques. |
| of organization". | | | | The inspections standards, planning, and |
| The main problem of Tax Administration's | | | | evaluation methods of the Tax Inspectors Board |
| non-effectiveness is the lack of comprehension of | | | | be adopted by the other units personnel. |
| the relationship between organizational | | | | The contemporary human resources |
| performance and structural and managerial | | | | management strategies of the tax audit are |
| malfunction. The performance problem of tax | | | | provided in order to compromise the other |
| administration is caused by undefined and | | | | inspection units. Many applications would then act |
| non-grouped factors of organizational structure. | | | | more thoroughly like new member employment, |
| This is not a temporary problem; it is permanent | | | | employee education, professional development, |
| factor. Tax administration should be revised and | | | | performance evaluation, and career management. |
| re-organized according to groups of functional and | | | | Other units would greatly benefit and successful |
| geographical differences. General Taxation | | | | officers could be promoted to a higher level unit, |
| Directorate has in 2007 1,200 personnel, 36 tax | | | | with the highest level being the Tax Inspector |
| offices, 300 tax police, and 330 tax audit staff. | | | | level providing motivation to all officers. |
| It is very difficult to be productive and produce | | | | The establishment Manual of the Tax |
| effective tax policy with present "General | | | | Audit is a best point of referent for the audit |
| Directorate" type of organization. There is an | | | | authorities to apply as well as they could. Tax |
| indirect relationship between the centralized and | | | | auditors are protected from every kind of |
| the decentralized organizations of the tax | | | | external intervention and political pressure. |
| administration, instead of a direct relationship of | | | | |