THE NEED FOR A REVIEW OF TAX EXPENDITURES IN THE WESTERN BALKAN COUNTRIES: A COMPARATIVE ANALYSIS

ISMAILI IMERI, Dardane and ALIJA, Shpresa and HASANI LIMANI, Vjollca (2026) THE NEED FOR A REVIEW OF TAX EXPENDITURES IN THE WESTERN BALKAN COUNTRIES: A COMPARATIVE ANALYSIS. In: INTERNATIONAL CONFERENCE “FROM RESEARCH TO APPLICATION”, 18-19 November, 2026.

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Abstract

Tax expenditures revenue foregone through exemptions, reduced rates, credits, deferrals and other preferential tax treatments represent a substantial but frequently opaque component of fiscal policy in the six Western Balkan economies (WB6): Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia. This study assembles and critically compares the available institutional evidence on the magnitude, structure and transparency of tax expenditures (TEs) in the WB6. Drawing on International Monetary Fund (IMF) and World Bank fiscal transparency assessments, national tax-expenditure reports where they exist, and the Global Tax Expenditures Database (GTED) and Global Tax Expenditures Transparency Index (GTETI) maintained by the Council on Economic Policies (CEP) and the German Institute of Development and Sustainability (IDOS), the paper documents wide disparities in reporting practice across the region. Albania and North Macedonia have historically published dedicated tax-expenditure estimates, while Serbia initiated an IMF-supported comprehensive TE reporting framework. Where estimates exist, TE/GDP ratios in the region (Albania, approximately 5.4% of GDP in 2020; North Macedonia, approximately 3.0% of GDP in 2019) sit close to or above the global GTED average of 3.7–3.8% of GDP, suggesting that the fiscal cost of preferential tax treatment in the WB6 is non-trivial even where it remains largely unmeasured elsewhere in the region. The paper constructs a composite Tax Expenditure Reporting and Transparency Index for the six countries, discusses the drivers of cross-country variation, and argues that the absence of systematic reporting rather than necessarily the absence of tax expenditures is the central empirical and policy problem facing the region. It concludes with recommendations for a Western Balkans Tax Expenditure Reporting Framework aligned with EU accession and OECD/IMF good- practice standards.

Item Type:	Conference or Workshop Item (Paper)
Subjects:	H Social Sciences > H Social Sciences (General)
Divisions:	Faculty of Law, Arts and Social Sciences > School of Social Sciences
Depositing User:	Unnamed user with email zshi@unite.edu.mk
Date Deposited:	11 Nov 2026 10:32
Last Modified:	11 Nov 2026 10:32
URI:	http://eprints.unite.edu.mk/id/eprint/2723

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