Rising prices are becoming a significant source of additional revenue for the state budget. According to projections by the Ministry of Finance, indexing for inflation of 2.1% will generate around 5.4 billion lekë (approximately 58 million euros) in additional revenue from taxes and customs duties, mainly through VAT and the effect of price changes on the value of imports.
Because VAT is calculated as a percentage of the price, every price increase also raises the amount of tax citizens pay for the same quantity of goods and services. As a result, the state collects more revenue, even if consumption does not increase.
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According to the revenue forecast document for 2027, revenue from taxes and customs duties is expected to reach 583.5 billion lekë, compared with the 536.2 billion lekë target for 2026. The difference is around 46.9 billion lekë, or an increase of 8.7%.
Calculations based on these figures show that around 11.5% of the additional revenue projected for next year will come from the effect of rising prices.
Inflation, which weighs on household purchasing power, also brings more revenue into the state coffers. The effect is particularly noticeable in regularly consumed products and services, for which households have fewer opportunities to reduce their purchases.
Of the overall increase in revenue, around 13.3 billion lekë is expected to be generated by economic growth, which the Ministry of Finance has estimated at 2.73%. Meanwhile, the effect of indexing for inflation of 2.1% is calculated at 5.4 billion lekë.
Taken together, economic growth and inflation are expected to generate around 18.8 billion lekë in additional revenue, or 40% of the total planned increase in collections from taxes and customs duties.
Unlike economic growth, which is linked to the expansion of production activity, consumption and incomes, inflation can increase nominal collections even without an increase in the quantities of goods and services circulating in the economy.
For the budget, this creates an additional source of financing, while for households it means that a larger share of their spending goes toward coping with higher prices.
In addition to the effects of prices and economic growth, the government expects to secure additional revenue through fiscal measures and improved tax administration.
The measures under the Medium-Term Revenue Strategy are expected to contribute around 10 billion lekë in 2027. The strategy aims to expand the tax base, limit informality and tax evasion, improve the collection of liabilities and increase the effectiveness of the tax administration.
A further 4.4 billion lekë is expected to be secured through the budgetary fiscal measures for 2027, while measures introduced in previous years are expected to generate an additional effect of 1.4 billion lekë.
The Ministry of Finance has also included around 12.8 billion lekë from adjustments based on other factors./Monitor
