Albania Threshold Program

Targeted Selection Indicators

Albania’s original threshold program targeted the policy areas measured by two MCC selection indicators: Control of Corruption and Business Start-Up. When originally selected as eligible for a threshold program, Albania did not meet the criteria in the Ruling Justly and Economic Freedom categories. Recognizing the constraint that corruption places on development and the proper functioning of institutions and systems, the Government of Albania proposed to work to reduce corruption in tax administration and public procurement and to strengthen the business climate by streamlining business registration.

Program Achievements

Albania’s initial threshold program was largely implemented as planned and achieved most of its intended goals. The program launched an electronic tax return filing system, which became mandatory in 2010. This system reduced interaction between tax inspectors and taxpayers, resulting in reduced opportunities for corruption in revenue collection.

The program helped streamline business registration procedures by creating a one-stop-shop that reduces the days to register a business from 42 to 3, driving a 49-point, one-year rise on the Doing Business Report in 2009, and a smaller increase in 2010. The new registration system automatically brings new businesses into the tax system, which expanded the tax base and increased government revenues.

The program also created an electronic procurement system now used on all procurements above $4,000 in value. The system doubled competition for the average tender, reducing costs to the government by nearly 12%, and won a United Nations Award for Public Service in 2010.

Albania Threshold Program Implementation

Albania’s initial threshold program agreement was signed by the Government of Albania and the United States Agency for International Development (USAID), which was responsible for implementing the program on MCC’s behalf, in April 2006. The program officially concluded in November 2008. As the program administrator, USAID managed day-to-day program operations and oversaw the program implementing partner, Chemonics International, and its many subcontractors. The threshold program worked with five Albanian government entities and a range of civil society organizations. Read more about the Albania Threshold Program on the USAID website.

Program Budget

Milestones

  • Signed:
     April 4, 2006
  • Closed:
     November 15, 2008

Program Projects

Business Registration Reform

Objective

Combat corruption in business entry and registration

Activities

Increase the use of the electronic systems to track progress and increase transparency

Streamline processes and required documents for registration

Establish a “One Stop Shop” (National Registration Center) for business registration

Revise administrative rules so that approval is automatically granted if a relevant agency does not respond within a given time frame

Grants Project

To support the efforts of civil society to monitor the government of Albania’s anti-corruption efforts and serve as an advocate for improved efforts where necessary.

Activity: Provide grants to civil society to monitor the government’s anti-corruption efforts and to advocate for further government anti-corruption reform.

Public Procurement Reform

Objective

Create transparency and reduce corruption in government procurements

Activities

Improve procurement transparency by establishing an electronic procurement process in 25 ministries

Create a Procurement Advocate to monitor and investigate violations of procurement rules

Strengthen the Public Procurement Agency’s oversight of government contracting authorities, through training of contracting officers and technical assistance

Tax Administration Reform

Objective

Reduce corruption in tax policy and administration.

Activities

Limit interactions between tax officials and taxpayers by instituting an electronic tax filing system

Improve tax collection by upgrading information technology applications

Provide training and manuals to tax collectors, internal auditors, and the judiciary

Strengthen the Tirana Tax Department to improve fiscal transparency and accountability