Speech by Prime Minister Edi Rama at the National Economic Council meeting:

 

Good evening and welcome!

This is the first meeting of the National Economic Council of the new government, and in addition to thanking you for your presence, I want to underline that we are very much keen to further improve the process of communication and interaction with entrepreneurship and with all market actors, based on the experience created, and by reflecting with them also the gaps we have identified based on the analysis of the past four years.

We strongly believe that we have created for the country, the entrepreneurship and for ourselves, in the sense of state institutions, a new base, a platform where interaction among us can be not only more active but much more efficient.

This government has in its composition also a new figure, a new role played by the Minister of State for the Protection of Entrepreneurship as the entrepreneurship’s advocate within the government, so that every concern of each enterprise in particular, but even of the various interest groups within the business world, will reach immediately the highest peak of the pyramid and through the Minister of State for the Protection of Entrepreneurship, the relevant ministry and minister will take action in order to address a determined problem of entrepreneurship, whether it is a problem concerning a specific group, or a problem concerning an entrepreneur’s relation with the administration.

I would like to say that in these few weeks of work of the new Minister of State for the Protection of Entrepreneurship, 49 cases of the direct communication of an enterprise with the government have been addressed. Some of them have been solved, some are in the process. What is worth underlining is that the process is being conducted in each sector by the respective minister. The respective Minister is responsible for the sector’s response through the minister regarding the problem presented. I believe that this applies not only in terms of concrete solutions, but also in creating a suffocating climate for the elements of the administration that can behave unevenly, that may have wrong approaches, or that can make decisions that harm the work of entrepreneurship.

The creation of this suffocating climate will enhance with your help and, of course, with your cooperation, with the cooperation of all actors in the market, the figure of any entrepreneur, it will increase the authority of any company, in order to make it clear that every company is an asset, not only of its owners but also of the country and as such it cannot be harmed by anyone. If a company has a problem with the state and has an obligation that has not been met, this does not mean that the company is to be treated in a non-dignified manner. Rather, it means that we do our utmost to solve problems in mutual interest, both for the company and the state.

So, before I go into some details of today’s issue, which is the 2018 budget, the fiscal package and the deregulation process, I would like to repeat my appeal to you for all large or small entrepreneurs, whoever exercises economic or trade activity in this country, to test us in relation to what I said above; to use their lawyer inside the government, which is the State Minister for Entrepreneurship; not to choose an illegal agreement to deal with a situation that artificially appears before them in elements of the administration seeking to gain benefits at the expense of entrepreneurship, but to choose cooperation with the state minister and the government to deal with it by taking direct measures for anyone who creates these artificial situations.

Even when they are in difficult a position because, violations or unfulfilled obligations are found as the result of controls, they should not accept any arbitrariness and should not give up on their right to be treated with respect seriously and fairly.

Today, this meeting is dedicated to the budget, a major topic of the year. I believe that even in terms of figures and facts of the economy, we can say that we are in the conditions when the ambition to do much more is legitimized from the grounds that we have laid.

I want to emphasize that it is the fourth consecutive year of economic growth. Economic growth has a relative acceleration, of course in relation to the previous year, and today we have an economic growth which is fourfold compared to that of 4 years ago. But not only that. The stability of the economic growth rate is a significant indicator of the fact that reforms are fruitful, and we will continue to deepen them, being convinced that it is the only way to have an even greater economic growth.

Of course we are aware of the necessity of consolidating the foreign investment figure, which means that in the 4-year period ahead, we need more foreign investments to consolidate the highest historical figure that has been reached in terms of foreign investments, and create the conditions so that some of the country’s great potentials, still untapped in a substantial part of them, such as tourism, are used for example in view of the employment and welfare of citizens.

Reducing the public debt is another good and meaningful sign of a process which you all remember very well as we started from a dramatic situation in terms of the state account books.

In our view, it is important that public investment will grow by about 42% compared to 2017, as a key priority for next year. At the same time, the budget will guarantee the progress of fundamental reforms, from justice reform to public finance reform, to public administration reform, territorial and administrative reform, and water reform that will enter its most significant stage next year. Also, the forecast on revenue, which will be exceeded according to our projections in this year that is closing, is to have an increase of the National Production by about 6.3 percent in 2018, and reach 28.1 percent of this output, a 26 billion increase which, of course, will be based on further economic growth, but also on the decisive escalation of the fight against informality. We have very encouraging data from the fight against informality in this new phase, and it is also a result of this war that the projection of revenue growth at the end of the year has significantly exceeded the forecast made at the beginning of the year.

I don’t want to go into details. I believe that the subsequent explanation of the Finance Minister will be exhaustive, and of course the interaction among you will help to go into every important detail, but I’d like to focus on the fiscal package. Finally, after an intense hearing process at all levels with entrepreneurship, with independent experts in the field within the government, and based also on the international expertise that is assisting us, we have decided that in terms of VAT level we will lower the threshold to 2 million ALL, because we believe that at this stage we not only guarantee the success of the anti-informality operation, making it much more difficult for large or small businesses to subtract their turnover, thus helping significantly honest competition in business formalism, but, on the other hand, I believe it would have undeserved costs for the category with a turnover up to 2 million, if it got involved in the VAT scheme.

I would like to reiterate what the Minister of Finance has said, but not only, that anyone who is concerned about increased administrative costs or raised prices should not be worried for neither of them will happen and everything will develop naturally in the ratio between the real turnover and the real need for administration and above all, what is more important is that reducing the VAT threshold does not mean that all businesses operating within the current limit, have made evasion. Therefore, a significant portion of small businesses that were outside the VAT scheme and which still are until the new scheme enters into force, have acted correctly. So, here it is a crucial and final strike on that part of the small business that has acted incorrectly by making unfair competition within the small business and by abetting all the channels of unfair competition among big companies.

In addition, we get into another scheme of taxation on buildings, without any tax increase, but simply by passing from a flat tax to a tax based on the value of the building, which is practically possible in the conditions when an important part of local government is today more consolidated due to the reform and, on the other hand, on the basis of our principle that those who have more should pay more, those who have less should pay less. Along with the package, we have a package which we believe comes at the right time in terms of the incentive we will give to investment in tourism after lowering the VAT threshold, bringing it from 20% to 6%, the lowest level in the region. We will exclude from taxation, we will exclude from the impact tax on infrastructure and from the property tax, all tourism investments for 4- and 5-star accommodation structures. Of course, these accommodation structures must be certified according to a well-known and globally certified global brand list, which means that it will not be enough for anyone to produce 5-star shaped tin sheets, pain them yellow and stick them on the terrace in order to get these incentives, but it means that the 5 stars or the 4 stars are certified by an operator who undertakes to operate the facility. Thus, in addition to the advantages of the law on land-related strategic tourism investments, with this certificate the investor has all these facilitations. We are still discussing about the social insurances for the employees of all these structures, when the latter are inactive, but this is still to be defined and I cannot tell anything in this regard.

We also have an incentive for the information technology sector. 5% profit tax for all entities that produce “software”. We will totally exclude from VAT 52 categories of fishing equipment and tools. We will change the cigar excise by rescheduling its growth.

Finally, the third part is the further continuation of what we have considered as a priority in view of the greater, drastic relief of entrepreneurship and citizens from the burden of bureaucracy: the deregulation reform. We have many rules. We have a piece of paper for every rule, and behind every piece of paper, all these years we have usually found a parasite, or a predator.

The deregulation reform is a fundamental initiative of this mandate that focuses precisely on citizen and entrepreneurship in order to maximally unburden them from the rules that remain only on paper and from the papers that turn into instruments for corruption.

First, this reform aims at guaranteeing something which I believe constitutes a capital relief. Any document requested by a citizen or entrepreneur and which a citizen or a company must obtain from the state, should be provided by the requesting office. Any document produced by the state must be obtained by the office that needs it on behalf of the citizen or of the company, thus ending the endless stories of bribery which are one of the main reasons of stress and nervousness of people in their daily life and work.

The group set up to draft the entire document on the recommendations for deregulation, has decided on the table of the government, and it is actually on the table of each ministry, a concrete plan to modernize this reform.

I’m just telling you a fact: – I won’t keep dealing with certificates and so on – it was found that a total of 140 documents has been issued 590 thousand times in 13 dependent institutions in one year. 590 thousand queues. 590 thousand people traveling to be in that queue. 590 thousand payments. 590 thousand opportunities to make hell the lives of 590 thousand individuals.

The most important part of these documents is a number of certificates issued by the General Directorate of Taxes that produced 275.702 certificates in 2016 only. Likewise, there are over 150.000 extracts that have been issued by the National Business Centre for a year. 3 certificates of the National Employment Service have been issued 110 thousand times in a year, or 9.200 authorizations issued by the General Directorate of Customs. Endless hours wasted at the taxpayer service counters to get certificates.

Taxpayers have wasted 92.000 hours because of these 9 certifications only. 71 thousand hours wasted only by waiting for the extracts of the NBC. 74 thousand hours wasted for customs authorizations. 9200 authorizations and 74 thousand hours. Crazy! Today we are in the conditions when there is a long list of documents, certificates, which are no longer your obligation or that of any venture. 56 years wasted in one year only for a set of documents.

Meanwhile, we will continue to deregulate permits, deregulate licenses and deregulate authorizations to end as many administrative acts that are produced on a daily basis with all sorts of names, and due to which a vital part of our society has wasted its time in the corridors, on the phones, in the labyrinths of a stress that it has been accumulating for 27 years. There are 141 types of authorizations issued by 19 central institutions. It is incomprehensible what the ministries have to do with authorizations, which means that the remaining 94 licences will go to the enforcement agencies. Their inventory is complete, and I believe that by the end of next month we will have a final list that we will share with you as part of the law on licenses and authorizations that we will review in Parliament in order to cut once and for all these parasitic branches of the tree of state rules for citizens.

The Ministry of Finance and Economy will soon introduce new online services, and 24 authorizations of the General Directorate of Customs will be available online within 100 days, the services provided by the Labour Inspectorate can be obtained online, employment certificates and the employer’s declaration from the National Employment Service can be obtained online. Also, within the first 300 days there will be a number of other processes that will be completely online.

These were more or less the three aspects related to what is actually the goal both of the budget, the fiscal package and of deregulation, which is further economic growth, fostering productive investment, increasing employment and, of course, increased income that translates in increased welfare.

Hoping that every one of you here, by taking advantage of their knowledge in specific sectors, will be encouraged to make concrete proposals for permits, licenses, authorizations, certificates, documents that in your experience have resulted unnecessary, unreasonable, excessive, or which can be compensated by something else that exists, and by asking all the entrepreneurs who follow us, or who will be informed by you through interest groups to do the same, I assure you that we will be always ready and we are super-motivated to make this state the state with fewer rules translating into papers, and the state where the remaining rules and papers are sufficient to guarantee the activity of everyone and of the community, and in order to drastically reduce the corruption of bribery and the torture caused by procedures.

Thank you very much!