Instability of Finance in Local Government Case of Albania
Instability of Finance in Local Government Case of Albania

Summary/Abstract: The aim of the paper is to analyse the instability of revenues in local government of Albania. Also it would identify the modes of revenues distribution and the possible implications of tax system structural changes. The analysis includes 48 local units from which 27of them are municipalities. The selection is based on average population and revenues on each region according to the Ministry of Finance. First it will be presented the main principles governing the intergovernmental transfers; also it will present the challenges of recourse mobilization and management of local revenues. The paper also will analyse the main sources of revenues in local level, the local autonomy on defining the taxes. The paper will show the possible policies for the improvement of defining and administrating the tax system. At the end the paper undermines the causes of the week performance of taxation in local governments and it tries to understand the most important factors that support the tax administration in different periods, by including efficiency, risk of trust and availability of the taxpayers’ data.

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