Ida Ismalaja
From minimum wages to cash sales without invoices, the construction sector remains one of the main sources of informality in the economy. The Tax Administration has put into motion a new risk management plan, introducing 8784 active construction companies across the country. The main goal of the plan is to address informality in the sector and create a reference mechanism for assessing average wages.
in medium-term strategy of revenues 2024-2027, construction is considered one of the key sectors for budget collections. However, behind the official figures lies a problematic reality with wages below the real market level, undeclared work and the use of fictitious invoices. The Risk Management Directorate has identified construction as a sector with high fiscal risk, from the construction permit to the final sale of apartments.
According to the Taxes' analysis, the main problem is related to the failure to fully declare turnover and areas. This includes declaring sales prices below market level and below reference prices, as well as "cash" sales without issuing invoices or fiscalization, especially in the early stages of projects through informal down payments and prepayments.
Another high risk is related to under-declaration of labor costs and informal employment. There is a low number of declared employees in relation to the volume of works, wages much lower than the average market level for construction professions, and the use of temporary or undeclared workers in the intensive phases of works.
According to the Tax Agency's analysis, about 25% of construction workers declare salaries of 40-50 thousand lek, well below the real market level for professions in this sector. Labor expert Gertjana Hasalla emphasizes that construction is among the sectors with the highest percentage of low-wage workers and at the same time with a high risk of accidents.
"The construction sector accounts for about 24% of occupational accidents and is one of the lowest-paying sectors in the market," she says.
The use of fictitious suppliers and false invoices to artificially increase costs and reduce taxable profit and VAT payable remains a serious problem. Tax authorities have identified numerous cases of the use of "shell" companies, entities with no real activity or staff, as well as suppliers with a history of non-payment.
Discrepancies have also been found between building permits and tax declarations, where the areas declared for fiscal purposes are smaller than those approved in the permit or registered in the cadastre. In many cases, projects are physically completed, but revenues are declared late or only partially.
Due to the high volume of cash transactions and the difficulty in determining the real cost of construction, the sector is seen as vulnerable to money laundering. Reports indicate the use of construction projects to recycle capital of dubious origin, through informal sales and partial declarations.
The Tax Administration has announced in-depth controls on entities that do not declare real salaries by profession, keep employees at a minimum level, do not fiscalize every sale or advance payment, use fictitious suppliers, do not match construction areas with official permits and create new tax debts, mainly in VAT.
Construction remains an important engine of the economy, but at the same time one of the most problematic sectors for informality. The establishment of reference wages, electronic monitoring and in-depth risk analysis are necessary, but without real implementation and effective punishment, they remain insufficient measures./acqj.al
