Fuels are the most important product subjected to the excise tax in Albania; therefore, they are a very important source of revenue for the government. However, because of the specifics of fuels, the fiscal control is more difficult to be implemented by pertinent state agencies. Unlike many other excise products, fuels cannot be certified by fiscal stamps to prove the payment of excise and other taxes, verifiable at any moment by the inspectors of tax and customs office.
Albania is a country with a complex industry of fuels. Albania owns the biggest oil field in the continent of Europe; however, on the other side, as for refined fuels for consumption, in the Albanian market operate local refineries and other companies importing fuel for local market or re-exporting, mainly towards Kosovo. Therefore, Albania remains a vulnerable country towards adulteration, smuggling fuel, low quality of fuel, etc. These problems cause big losses for the government every year.
Smuggling is a common tax evasion method on hydrocarbon oils and fuels. The national revenue authorities in many countries lose the taxes and the consumers bear the burden of higher duties to compensate for the lost tax collection. Smuggling is common in environments characterized by:
- Significant volumes of transit fuel, commonly destined for export
- Significant fuel price discrepancies between neighboring countries
- Tax subsidies or unequal taxes on similar products
- A vulnerable control system in the chain of distribution
Adulteration is the practice of mixing cheaper products with more expensive ones. Adulterated products have numerous detrimental effects on vehicles, the environment, public health and the fuel dispensing equipment. Adulteration is common in environments characterized by abundant Kerosene, paraffin, and aviation fuel that are commonly mixed with diesel and sold at the higher price. It occurs in areas with significant differences in product prices, and significant tax subsidies or high tax differences on fuel products and solvents. Albania is a country where the problems caused by adulteration are evident, by reducing the budgetory revenues and causing many damages for the consumers and environment.