The Pensions, in an Open and Informative Discussion with Entrepreneurs to Unite Forces Against Informality

The public discussion on the issue of pensions continued today under the leadership of Prime Minister Rama with entrepreneurs, in a debate about the importance of fighting against informality and the non-declaration of real wages.

Prime Minister Rama called on entrepreneurs to create a common front to eliminate this unjustifiable phenomenon and to ensure that pensioners receive their rightful share from every wage in the country.

"Those who create jobs in this country, the businesses that pay for labor, have the obligation that every cent of every payment for every person goes to pensioners. This is a duty for everyone who receives a wage," emphasized the Prime Minister, labeling the non-declaration of real wages as a form of theft.

"We have a serious problem, despite all the improvements made in wage declaration. We are determined to address this issue without waiting for gradual improvements. We want a quick improvement and trust, that companies will not need to face heavy administrative or even criminal penalties for the theft of pensions. This is theft," the Prime Minister stated.

The meeting was also attended by the Minister of Economy, Culture, and Innovation Blendi Gonxhja, the Minister of State for Entrepreneurship and Business Climate Delina Ibrahimaj, the Deputy Minister of Economy, Culture, and Innovation Olta Manjani, as well as the heads of Social Insurance Institutions and the General Directorate of Taxes, part of the working group on pensions, who explained various aspects of the ongoing work in this regard.

***

Prime Minister Edi Rama: Greetings! Thank you very much! Thank you also to the hosts for providing us this opportunity here, in one of the major enterprises, which in a way symbolizes the Albania that has been growing for almost 35 years. This enterprise is one of the first roots of the trunk of today's economy, so thank you very much for the hospitality and the opportunity.

Thank you all, for being present here for this open discussion that we started yesterday and will continue in the coming days, concerning a key topic, a priority concern, and a major obligation for us as a government, as well as for you as entrepreneurs, and for all of us together as children of parents or grandchildren of grandparents who are currently retired and who, by the grace of God and through their long years of hard work, deserve not just respect, but deserve that none of us shuns the obligations we have towards them.

We have the duty as a government to do everything possible to ensure that their lives are as peaceful as possible, that their living conditions improve as much as possible. Those who create jobs in this country, the businesses that pay for labor, have the obligation that every cent of every payment for every person that belongs to pensioners goes to the pensioners, and this is certainly an obligation for everyone who receives a wage. Meanwhile, in the public sector, this obligation is fulfilled because it does not depend on the behavior of the person being paid; it goes directly to the Social Insurance Fund. However, the same does not happen in the private sector.

So, to be brief and to pass the floor to my colleagues who are here with me as members of the working group on the pensions issue, we have a significant problem, despite all the improvements made, regarding the declaration of real wages which is a very serious problem that we are determined to address, not waiting for gradual improvements, but seeking a quick resolution. We hope and believe that companies will not need to be under the pressure of severe administrative and possibly criminal measures for the theft of pensions. This is theft. It is a very strong word, a great shame, and a behavior that has taken on the status of a standard in many businesses, marked by a lack of responsibility. I am sure that when you mention or hear the word "theft," you may feel offended, but this is theft.

We are here for this reason; we want to convey to you, to all those belonging to this category, the category of entrepreneurship, a concern, an appeal, and an invitation to create a common front in this effort. I will conclude with the company that has hosted us, and is directly related to consumption, all this money, for the most part, returns to consumption and generates further income. It is very unfair, it is very unacceptable, and we must collectively do what is required.

I will now pass the floor to the Minister of Economy and then, in turn, to the Minister for Entrepreneurship, the Deputy Minister of Economy, the Director of the Social Insurance Institute, and the new General Director of Taxes, who has joined our team after ten years of experience in the United States in the field of taxes and financial audits. Then I will attempt to draw some conclusions and, of course, I am ready to hear from you whatever you have to say related to this topic.

Thank you all very much, and thank you for your patience and attention. I would like to summarize what has been said, starting from an example provided by the Director of the Social Insurance Institute, who mentioned that what happens in the reality of the relationship between the state and the pensioner is that whatever the state collects from the social insurance contributions (declared by businesses in September) is immediately transferred for pensions in September, and this is the mechanism.

In fact, in the payment of obligations, there are obligations to social insurance, obligations to health insurance, and taxes. The tax goes to the budget. It is invested in various projects and spent on different functions of the state, while social insurance goes from the bank, where the employee's salary is paid, to the counter or to the bank where the pension is given.

I mention this to clarify that those who do not pay social insurance or those who hide the real weight of social insurance are, in fact, stealing from this transaction; they are taking money from the cars of this train that makes back-and-forth trips between paid contributions and received pensions. This is direct.

Therefore, those who do not pay social insurance cause two big damages at the same time. The first damage is to the pensioners, and the second damage is to the children of this country, who need an Albania with more kindergartens, more schools, more quality services in all directions, and more and more because, in fact, these 500 million euros every year should stay for this part; it should stay for the children, it should stay for the development, it should stay for the future. It should not go for the contributions of the past. The contributions of the past should be covered by the other portion, that which is directly from social insurance.

This does not happen-or rather, it does not happen as it should-because, as the Deputy Minister said, we have added almost 300,000 contributors to social insurance. The Minister mentioned that we started this work with a situation where 60% of wages were below 40,000 lek.

Today, 40,000 lek is the minimum wage in the Republic of Albania. However, we cannot continue in this way. Why? Because the economy has grown, prices have risen, due to the increase in all value chains and, of course, because of a larger context than our own. Demands are increasing, needs are rising, and the overall pressure is growing. Meanwhile, pensioners rightfully seek their share of this growth. They are the only part of society that still does not have their share in this increase; on the contrary, they are affected by the consequences of this rise.

The Deputy Minister expressed this in very gentle terms, but I will say it plainly. It is not just unimaginable; it is a complete deception to claim that the average wage in construction is 600 euros. This does not exist. And here you all are, entrepreneurs, and you know very well that for serious enterprises in Albania, the question is no longer " What is the salary you're expecting?" The question is "Where can I find someone to do this work exactly?". Today in the middle of Tirana, we have a business that has a network throughout the region, but it is now in a much stronger competitive environment and requires much more knowledge and qualifications, of course, it is willing to pay and does pay more.

The issue of social insurance is a matter of social security; it is not merely a formal obligation. It is a matter of social security and is neither government aid nor a government gift. It is nothing other than a direct obligation.

The pension system is not a company. It is simply a system that functions, as a channel for transmitting what is collected here and immediately sent there to pay pensions.

I return to what was mentioned here. We are talking about an economic reality where, because we started from very far behind, when we began this upward journey to bring Albania to where we want it to be by the end of this decade, we found businesses exhausted from shocks, from arbitrariness, from debts. We found the state sunk in a pit that could turn into an abyss, with over 700 million euros in debts, not counting the debt of the electricity, which alone had a debt as large as Mount 'Dajti'.

We built a path where, first, we aimed to stabilize the taxation system; second, we aimed to completely relieve small businesses from taxation; and third, we aimed to expand the base of contributors without raising taxes. Today, as the Minister said, we are the country with the largest space for business facilitation. There is no other place in our region-let alone Europe-where small businesses have a 0% tax rate. This is the only one. Zero! They do not pay taxes up to 140,000 euros. Meanwhile, up to 100,000 euros, they do not pay VAT or any taxes.

When we assumed our responsibility, there was a 10% tax on small businesses, and VAT applied to those with revenue over only 8 million LEK. So, we have left a completely free space. And what do we ask of small businesses? Just to pay social insurance, which, in fact, once paid, goes to others. But it is the guarantee that when you go to the other side, they will bring it back to you on that train. So, social insurance is yours; you pay it for yourself, while the money you provide at that moment goes to those on the other side of life's road-in pensions.

And not paying social insurance? What does that mean?

Large businesses, big companies, have only a 15% tax rate, which has remained unchanged for years. When comparisons are made and Albania is placed alongside those comparisons of wages in the region, the region is much closer to the real wage, while we are far from the real wage when we look at those figures because real wages in Albania are similar to those in the most developed countries in the region, which is Serbia. However, in declarations, we fall below, and it's good that we fall below in reports, but in reality, down there is a pit. It is a pit where pensioners survive. From the perspective of social solidarity, this raises a significant question about our social capacity to meet the standards of social solidarity. This is a major question, and we need to provide an answer to this question, one way or another.

There is no government, no prime minister, that does not want to increase pensions as much as their parents or grandparents would wish. However, pensions do not increase simply because you want them to; pensions increase by increasing contributions and simply giving what is rightfully owed.

At this point, I want to go back to what the director of Taxes said. You know very well that we have completed the first phase of the digital revolution in revenue administration with fiscalization. This has brought very positive developments, but it has shown us that as a community-let's say, to avoid burdening the entire population-we have a capacity that, if large companies like Google and Microsoft utilized it, they would have advanced even further.

But we have found the solution. This is the news I have for all businesses: very soon, you will see that tricks with fiscalization will no longer work because Artificial Intelligence has emerged. So, an "eye" has appeared that catches every trick, and all transactions will go through that eye. This eye is not like the eye of the Tax Inspector; the Tax Inspector's eye has the problem of seeing only what it wants: it doesn't see anything at all if you know how to circumvent it.

This eye of artificial intelligence, which is being introduced among us, will help us with two things.

First, it will help us understand who lies and who sometimes records transactions in the fiscal cash register and sometimes does not.

Second, it will also assist us in another matter: businesses that are compliant and are examples in law enforcement-there are plenty of them. If we didn't have any, we would say, "There's nothing here, it doesn't happen." No, there are plenty of businesses, many companies, and they will no longer see any inspector at their door, at all. None! They will no longer want to know where the Tax office is because that eye will observe everything, will monitor every transaction, every movement of money 24/7, even while you are sleeping. It will provide the report that this business does not need any inspection.

You must prepare yourselves because we will no longer accept salary declarations as you want. This should be clear. The game of "declare a 600-euro average salary in construction" will end, as the government takes from those 600 euro the portion of social insurance that comes from it and sends it to the pensioners, while pensioners wait to receive what is owed to them. On the other hand, we try to fill the gaps with taxes. This game will end with salaries because the revenue institutions will not accept it based on risk analysis with the model of artificial intelligence that is being tested and is producing results that completely liberate the burden from businesses, allowing them to finally be free from inspectors.

So, I urge all companies to declare real salaries.

At first glance, this seems a bit more complex but thanks to technology, it is completely manageable. However, if in this relationship the institutions encounter stubbornness and a refusal to accept the truth when they return the declaration and say, "No, it's not that amount," everyone will be given a second chance. Based on the initial declaration, the risk analysis will produce a model that will indicate: this company is not telling the truth. It will be returned to them with a message: "This is not the real amount; reflect!" But it won't be an endless game also! A second failure to reflect will lead to other processes that are not for me, nor for the government; they are for the institutions and the judicial bodies because we cannot let pensioners wait any longer.

We have not had the opportunity, and I must say this is very important: it's not that we just remembered this today. We have been aware of it since day one, but we have not had the means to seriously address a significant increase in support for pensioners because the economy has not allowed us.

And it is truly disheartening, and I say this sincerely: it's frustrating for me that we need to have this discussion when it should be the normal state of solidarity with all those elderly people, whom many who don't pay social insurance complain about on television and social networks. But at this point, I have no problem saying that the great benefit for pensioners is that they are the most knowledgeable political analysts in this country.

These were the main points we wanted to discuss, and I know we've extended this conversation. To be honest, for many, it can be a bit tedious and even painful when it drags on, but thank you for allowing us not just to speak with you, but through this meeting to reach everyone we hope is following us, and I hope they understand what we're saying and they respond. Naturally, we won't base our actions solely on how they react; we are prepared for strong reactions. However, we firmly believe that our relationship with businesses should be one of partnership and understanding. I didn't come here to list the debts of businesses to the system, but we are working on that too. What the minister said is the foundation of our plan, it' s an effort for understanding before confrontation due to misunderstanding.

We can't leave without telling you that if there's anything you want to share with us, whatever it may be, we are at your disposal. Any concerns, questions, requests, complaints, criticisms, everything is welcomed, even though the founder of the company doesn't allow insults here since he runs global campaigns for ethics but we welcome them; we have no problem-we're used to it!

Thank you very much!

Public link

Please use the above public link if you want to share this noodl on another website.