“If we don’t put an end to the theft of energy, it will be impossible for us to look further to the real and sustainable development of the country.” With this appeal Prime Minister Edi Rama opened “Civic Forum of Fier”, a dialogue with the citizens of Fier on Government reforms, with particular focus on action against illegal benefit of energy. The Prime Minister called energy theft a dramatic wound to the local economy. To understand more clearly the effect of this phenomenon on the national economy, the Prime Minister recalled that the theft of energy is equal to the amount of income tax that is paid by companies to the state budget. Money that could be used for strengthening the energy sector and for other investments in favor of citizens.
Below is part of the conversation between Prime Minister Edi Rama and Citizens of Fier at the Forum:
“It’s a very important moment related to advancing the reforms that are certainly complex. There is also curiosity, questions and concerns, but there is also a lot of disinformation to the public. This is why I thought to stay here with you, a little longer, besides visiting several sites that are of great importance for this area. I will say only a few words and then with your help and answers to your questions, I believe that we will manage to create a more complete picture of the current situation and of the close perspective.
Firstly, in terms of electricity, we are very aware that without solving definitely the problem of electricity theft, all other things are not to be taken into consideration.
Theft of electricity is a phenomenon that has opened an extremely deep wound to the country and has affected our economy in an extremely dramatic way. If we do not close accounts with this phenomenon, we will be unable to look further to the real and sustainable development of the country.
Everything that we want, that the country needs to be directly connected to energy and energy security, with equality in relation to the burden of contributions and in relation to law enforcement, is related also to further investments in the sector which we can not do if we do not get back what the sector produces; it is also directly connected to a great saving of money, money that today is dissolved into the river of extraordinary theft of electricity. Let me just tell you that due to theft of electricity we lose every year an amount equal to the amount collected from income taxes of Companies. Thus, stopping the energy theft means for state coffers in financial terms doubling the companies, if we doubled the business activity in Albania.
On the other hand, there has been a big debate on the taxes issue, based not on facts not on the propaganda that taxes have been increased. Actually, it is the opposite. Taxes in practice have been reduced with the last year tax reduction for all employees in state institutions or in the private sector. We made a horizontal reduction of taxes and this is something that has directly affected not only the pocket of all this big layer of workers, but also consumption. We have had a substantial increase in consumption, which comes from the increase of the purchasing power.
As far as increased taxes in the recent fiscal package are concerned, there three of them. There are three taxes that do not relate directly to the broad mass of consumers, in the sense of affecting their purchasing power.
It is the carbon tax that has increased by 10 ALL. You remember last year when we increased by 10 ALL carbon tax, which is the tax oil circulation, catastrophic predictions were made as if something terrible could happen to Albania. And, in fact, today we have an oil price that is 10 to 60 ALL lower than it was a year ago. So, that tax has been felt in the state coffers and has been transformed in the investments that are being made across the country in terms of improving the quality of urban environment. Even here in Fier, we have some investments that are the direct product of that tax, but which has not affected the consumer’s pocket.
Secondly, there is the tobacco tax. We have said it and I want to repeat it here: we have increased it and will increase it in order to discourage smoking.
Thirdly, there is the deposit tax, which is not a tax applied to the vast majority of people, but a tax for those who have deposits in banks. Suffice to say that Albania has 9 billion dollars deposited in banks. By increasing the deposits tax, we aim at taking the money from the banks and investing it in the economy. So, this is not a tax that people have to pay by all means, but it is a tax that they can avoid by not depositing the money in the bank, or by taking part the deposits from the bank and putting them in investments.
This is a known tax that directly stimulates the economy, directly stimulates investments and entrepreneurship in view, of course, of employment and the opening of new construction sites.
The third problem that has caused again a big debate is the problem of illegal constructions. There is an ongoing effort to confuse the demolition of illegal constructions in view of freeing communities and legalization of illegal constructions in the informal settlements. These two have nothing to do with each other. What are we doing with illegal constructions mainly in the areas of citizens and national roads, is completely unrelated to what we are doing on the other side, to continue with free legalization of houses in informal settlements. Thus, these two things not only are not in contradiction with each other, but they are complementary to each other.
I am president of the Association of Pensioners and I am very sorry for those individuals or businessmen who become the subject of conversation because they don’t pay electricity. Electricity is like the food we eat and we must pay for it. As a representative of the third age, I urge you to take example from the third age, because before giving the money to the family, we would put aside the money for expenditures, electricity, water, etc. It is a shame for them, because when we go and have a coffee, they raise the price of coffee and don’t care about us. The price of coffee has gone from 500 ALL to 700 ALL and coffee is made with the use of electricity. They take the money from us, but they don’t pay. This is a shame for those who do not enforce laws.
Prime Minister Rama: “I want to reiterate that the two categories that pay electricity most correctly are pensioners and persons with disabilities.
98% of pensioners pay electricity regularly, regardless of their condition, and 93% of persons with disabilities, such as paraplegia, tetraplegia, etc. pay electricity correctly.
So, there are two figures and two facts that tell everything about all those who make noise and write on social networks about how they will pay for electricity because they are poor.
Electricity is a commodity and as any other commodity it cannot be donated and neither stolen. I have not heard of anybody go to the bakery and say: “I’m starving, I have no money, so I will take some bread but I will give no money”. Neither I have heard of anybody go and take water in the store and say: “a family cannot be left without water, so I will take some water even if I have no money.”
We have made a very clear plan. We had a very strong debate that lasted several months with domestic and foreign experts, and financial institutions such as the IMF and the WB. There were two ideas: one idea was to increase prices uniformly and another idea was to remove the protective band.
The majority of opinions was to increase prices uniformly, because energy is sold far below its cost, today as we speak. Don’t listen to those who make propaganda, but energy is sold far below its cost.
We have chosen the other idea, not a uniformed increase of price, but the removal of the protective band, because this band which is supposed to protect the most vulnerable categories had unfortunately turned into a band behind which a large mass of robbers would hide. Protective band was established precisely for economic assistance to families, for people with disabilities and pensioners, heads of families. To all these categories we will give the money directly to their pensions, their pay, the amount of their economic assistance every month. So, not with the old mechanism according to which they would be reimbursed later, after paying, etc., because that mechanism was just a trick. Because, if we look at the budgets, every year money has been allocated for reimbursement but no money has been ever paid to refund the poor, because practically such a things was not possible, because the mechanism has been completely inaccessible to simple people.
So we decided to make available for over 200 thousand families belonging to these groups, a direct fund for raising pension, economic assistance and disability salary. This said, removing the band means that we will have the same and averaged price. Price will be averaged, and by no means will reach the caps preached day and night by those who want anarchy, who want confusion and who want Albania to be still a messy country so that they can take advantage of the fog that they left behind and now want to use it to hinder our work. We will eliminate electricity theft by any means and will put at any cost before the law and equality the obligations that everyone has, from electricity and so on. Pensioners will not pay for businessmen. The example that sir gave is very clear: “Pensioners pay for coffee, but who sells coffee doesn’t pay for energy.” Meanwhile, the consumption of energy is included in the coffee price. This is an intolerable thing. We will not tolerate this, but will continue intensively the fight from both the outside and the inside. From the inside with all those who will be caught in the act of stealing electricity, and from the outside with all thieves collaborators who have benefited at the expense of the company, at the expense of the public and in cooperation with the thieves.
Three directors of the corporation have been arrested, two current directors and one former director, and there will be no tolerance for anyone who steals and collaborates to steal electricity. This is indisputable.
In terms of the continuation of public works in this city, be sure that not only in this city, but across this district we will go further with the opening of new construction sites, because we are very aware that Fier has been abandoned for a very long time and practically from the central government budget, Fier has received much more compared to what it has received in many years taken together. But our objective, our commitment is to do in Fier in 4 years, what has not been done in 20 years taken together. We will definitely do it together, using also the great potentials that the administrative and territorial reform will bring. We will give this municipality a very special attention, so that economy can breathe, have more investments, have more self-employment through small business and this territory has a more vibrant social and cultural life.”
I am Secretary of the Association of Labour Invalids, of the Fier district. As far as electricity is concerned, we support the enforcement of government laws. Among the disabled, there is a small portion that has not been paying electricity for many years. Could there be deadlines so that we can pay?
Prime Minister Edi Rama: “I strongly believe that all the excuses and all the other reasons for not paying electricity are the result of a mentality that energy is a commodity that has no owner. This mentality makes people justify themselves with poverty, inability and I don’t know what else, while the fact that pensioners and invalids are regular payers of energy makes nil any kind of argument on this point. As for your question, we are preparing a mechanism for all those who accept a new agreement with the corporation. Not to write off. We will absolutely write off no penny, because it is not our money, we have not inherited it from grandfather or dad so that we ca make charity with the state money. But we will build a facilitating mechanism for all those who are willing to enter into a normal relationship with the company and in a limited time. This mechanism will be made public very soon. Minister of Energy, Minister of Economy and a group of experts are working to determine clearly how the mechanism would operate in a limited time, giving everyone the opportunity to enter the system even if they don’t have the potential to pay their debts immediately.
Once made public, this mechanism will be very clear as there are several ways provided to citizens, in order for them to enter the system and become citizens who are aware of their obligations towards the state. On the other hand, the company will not lose anymore due to political or electoral whims and appetites. We will never use energy for politics, in order to take votes in view of the elections.
It is a national asset, it is a common asset which we are obliged to pass to our children not as bad as we inherited it in the last 20 years of chaos. Especially from a blind politics of writing off obligations whenever elections would approach, which brought in fact an increased number of thefts and a decreased amount of money. If you look at the graph, whenever obligations have been written off, there has been a drastic decrease in collections. This is because even people who paid obligations would say: “Since they wrote off their obligations, we will not pay so they will write off ours as well.” Those who respect law are not fools, but the problem in this country became such that those who respect law were treated like fools by the state itself, by the government itself whose only concern was to make happy those who didn’t respect law for 20 years; its only concern was to close the eyes in front of those who would steal, on front of those who would make illegal constructions, in front of those who would occupy lands, in front of those who would not care about anything, only because they had the votes. This is unforgivable and will not continue anymore.”
