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Back taxes reach amount of 880 million euros with oil refinery company A.R.M.O dominating

TIRANA, Oct. 14 – The amount of back taxes that businesses in Albania, a majority of which have gone bankrupt, still haven’t paid back, reached up to 880 million euros in 2018. This data was disclosed in the Albanian State Supreme Audit Institution (KLSH)’s report on the factual budget of 2018. At the end of 2017, the debt amounted to 766 million euros, indicating an increase by 13 percent in 2018. Most of the debt burden is carried by the Regional Directorate of Tirana (43 percent of the total), the Large Taxpayers Directorate (28 percent of the total), followed by that in Durrës (7 percent).

Moreover, the tax authorities revealed a list of the 30 biggest debtors, at the top of which appeared to be oil refinery A.R.M.O, owing an amount of 67.7 million euros. Currently the company’s activity status is passive as it is going through the procedure of asset forfeiture.The second biggest debtor was Electricity Power Distribution Operator (OSHEE), with a debt of 5 million euros, followed by ‘Ionian Refining and Trading Company – IRTC’, another oil refining company, at 43.5 million euros.

The fourth in the list was EFOR sh.p.k. with a debt of 30.6 million euros. The company was established in 2007, with a focus on the import-export area as well as wholesale and retail commerce of various industrial goods. EFOR has been facing issues since 2013, during which it commenced the forfeiture asset procedure. In 2016 the company was listed as one of the many businesses with a mortgage lien and has remained this way ever since. The list goes on with another state energy operator, Albanian Power Corporation (KESH), with a tax debt of almost 16 million euros. Tax authorities confirm that there is currently an interagency communication going on with the company for the fulfillment of its tax duties.

Active companies shared 43 percent of the total debt, while inactive subjects shared 57 percent of it. KLSH conducted an auditing of the measures taken against ten of the biggest taxpayers, except for KESH sh.a, OSHEE, Bankers Petroleum, Albania LTD, Simmons Edeco Limited as they are currently not going through an administrative and judicial complaint procedure according to the Debt Management Facility’s report. The results showed that steps which the tax administration should take as part of the collection process of back taxes for its recuperation, had been incomplete and non-conforming to law no. 9920 ‘For the tax procedures in the Republic of Albania’. The procedure only went as far as the blocking of bank accounts, cutting the regular process short. 

 

The case of A.R.M.O

The processing oil refinery of A.R.M.O has constantly been subjected to abuse since it was privatized in 2008. The refinery has a history of being rented out by a mysterious company, exploited, not fulfilling tax duties and finally being abandoned by that same company to make way for the next one to do the same. Data provided by the Tax Directorate show that the amount of debt that the refinery’s associated companies owed to the government reached 126 million euros, while part of the previous obligations were pardoned through amnesties. 

One of its affiliated companies, Anika Mercuria Refinery Associated Oil, which is still registered as the owner of A.R.M.O in the National Business Center, owes around 6.7 million euros in debt and is currently going through the asset forfeiture process. Another affiliated company, Trading Petrol & Drilling (TPD) owes an amount of 76 million euros. The total amount of back taxes that affiliated companies of A.R.M.O. owe, is equivalent to 14 percent of the tax debt that all businesses share.

Currently the refinery is being used by ‘Toks Energy’, a company which does not have any back taxes due. However, it recently halted its activity due to lack of oil supplying by Bankers Petroleum.

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