Municipalities further increase dependence on new construction tax in 2023, took 37% of local income

Year after year the Infrastructure Impact Tax (TNI) levied on new constructions is becoming the main supplier of local revenue to municipal budgets.

According to official data from the Ministry of Finance, the most important source in the structure of local revenues at the national level in 2023 was the infrastructure impact tax from new constructions with 37% of the total, followed by property taxes (18 %), cleaning fee (13%) and non-tax revenue (9%).

Municipalities further increased their dependence on TNI which took 37% of their local revenue from 33% in 2022.

In 2023, 13.1 billion in infrastructure impact tax revenue was collected with an annual growth of 30%. Revenues from this item also hit an all-time high in 2023.

Despite the fact that in total this source is the most important for the local government, at the unit level about 72.9% of the total revenue from the infrastructure impact tax is collected only by the Municipality of Tirana.

The main sources of income have increased in absolute value, although their relative weight in the income structure has changed slightly.

TNI accounts for 48% of its income in Tirana, 65% in Kamëz, 52% in Kavajë, 49% in Himare and 39% in Vorë and Sarandë, but the Ministry of Finance estimates that this source of income does not ensure financial stability in time , although it broadens the building's tax base for the future.

Despite the fact that the Infrastructure Impact Tax has the largest weight in the local government's own revenues, the revenues from the hotel accommodation tax have experienced the highest annual growth compared to the previous year, with 41% (408 million ALL in 2023 compared to 290 million in 2022), followed by the infrastructure impact tax with a 29% increase (13 billion against 10.1 billion in 2022) and "other taxes", a 21% increase.

Performance in increasing property tax revenues in 2023 does not have much impact on local revenues, being at the same levels.

The Ministry of Finance estimates that one of the most important sources, both in terms of the weight they occupy in the total local income, but also the sustainability and growing potential as a source of financing, are the income from taxes on real estate .

During the year 2023, the local government realized 6.18 billion ALL in property tax revenue, which includes building tax (76%), agricultural land tax (10%), land tax (4%) and property transaction tax real estate (10%). 29 Building taxes account for 13% of the general local revenue, with a realization of 4.7 billion ALL in 2023, compared to 4.5 billion in 2022.

The national average is not far from the weight of the building tax in most municipalities: in over half of the municipalities, the income from the building tax is less than 12% of their own income./ Monitor