Rent benefits from municipalities - Perennial requests for transfer increases, causing negative impacts on the territory
While the proposal to increase the transfer of mining royalties to 25% for municipalities where mining activities take place is being discussed in the Assembly, this provision would not be new, as it has been defined by law even before 2015.
At that time, the legislation underwent changes with the argument that in reality the municipalities were not benefiting from the amount they were entitled to and determined that the transfer would be reduced to 5%, but with more simplified procedures. However, even the new procedure was not without complications for local government units, which has led to the complete non-benefit of even the 5% measure.
However, the discussion on the division of the rent between the central and local governments is not new, but despite continuous promises, there has been no change so far. Even a 2018 decision of the Inter-Ministerial Working Group for the Development of a Long-Term Platform for the Development of Areas with Activities in the Extractive and Processing Industry, which called for increasing the transfer to 50%, was not finalized. The working group was subordinate to the Prime Minister's Office, while the decision required the Ministry of Finance to propose legal amendments, emphasizing that the money should be used for projects of social value, such as hospitals, health centers, schools, kindergartens, sports centers, roads, etc., as well as for improving the environment.
Experts have often argued that the income from rents cannot be compared to the negative impact that extractive industries have on infrastructure and the environment, calling for increased benefits for municipalities that have a high level of poverty, despite their natural resources. According to an assessment conducted by the Association for Local Autonomy and the Association of Municipalities of Albania, 25% of municipalities possess large natural resources on their territory and they are home to 40 - 48% of active licenses. Among the most important are Bulqiza, Patos, Kukësi, Roskoveci, Selenica, Dimali, Skrapari, Fushë-Arrëzi, Mati, Mallakastra, etc.
The mining royalty is a tax paid by companies operating in the extractive industry at the time of sale of the product. For hydrocarbons, the royalty is calculated by applying a rate of 10%, for chromium, copper and iron-nickel, it is 6%, while for other minerals it ranges from 4%-10%.
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