Municipalities in "rematch" for taxes, collect double their amount - 371 million euros in 6 months, more income from property tax
The local government is collecting more and more revenue from local taxes and fees paid by Albanian citizens in each municipality.
According to official data from the Ministry of Finance, in the first half of the year, 61 municipalities in the country have collected approximately 34.8 billion lek or about 371 million euros.
Compared to the first 6 months of 2025, local government revenues for the period January-June 2026 are recorded with an increase of about 15.7 billion lek or about 81.9%. Even in relation to the plan, municipalities have exceeded the forecast by 68.2%, collecting approximately 14.1 billion lek more.
The largest increase is in local tax revenues. Categorized by item, about 28.9 billion lek or about 308 million euros have been collected from local taxes, up from 14.4 million euros collected in January-June 2025, doubling compared to this period. Meanwhile, a doubling of revenues is also noted in relation to the plan.
Revenues from property tax in the first 6 months of 2026 were realized at the level of 5.9 billion lek or about 63 million euros, with an increase of 1.2 billion lek or 25.4% compared to the previous year.
In the structure of local tax revenues, the contribution of revenues from two main taxes prevails, revenues from the infrastructure impact tax for new construction, which accounts for 37% of the total, and revenues from taxes on immovable property (buildings, agricultural land and plots), representing approximately 18% of total local revenues.
The largest increase in local government own revenue sources is from the infrastructure impact tax. The municipalities with the largest increase in revenue from this tax are Tirana, Vlora, Himara and Saranda, which also have the highest demand for construction.
The strong growth in revenues from this tax reflects the high dynamics of investments in construction, especially in tourist and urban areas. These revenues create additional opportunities for municipalities to improve services and increase investments in local infrastructure.
However, local government revenues remain largely dependent on state budget transfers. This dependence is an unfavorable indicator for the local budget, as local authorities often do not have the opportunity to generate sufficient resources to cover necessary local expenditures. Also, fiscal decentralization as the ratio of revenue distribution between the two levels of government continues to remain very low.
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