Digitalization of Tax Services in Albania and its Impact on Taxpayer Self-Declaration and Compliance

Abstract

In the era of technological development, economies are increasingly embracing digital transformation, reshaping the way businesses and individuals operate. Digitalization has emerged as a pivotal tool in public services of fiscal sector, driving efficiency, accessibility, transparency by reducing administrative burdens, fostering voluntary self-declaration of taxes by individuals and businesses. This paper brings to attention the importance of digitalization of tax services in a EU membership candidate country such as Albania. In recent years Albania has implemented significant tax reforms, including the adoption of e-filing, e-Albania services, e-invoicing, and real-time tax monitoring through the Fiscalization system. These reforms aim to simplify tax procedures, enhance compliance, improve transparency and reduce tax evasion. Despite these advancements, challenges persist, particularly for individual taxpayers and small businesses, which face difficulties related to compliance costs and technological adaptation. Moreover, these digital tax systems remain in a developmental phase and require continuous improvements to effectively meet taxpayers’ needs in real time. This research is based on combining quantitative analysis of official statistics from General Directorate of Taxes, with document analysis of fiscal policies and digitalization strategies. The methodology aims to assess the impact of digital tax reforms on taxpayer self-declaration and compliance in Albania examining both the opportunities and challenges it presents. At the conclusions we will see that digitalization of tax services in Albania has improved taxpayer compliance and self-declaration, but continued support, simplification, and targeted policies are essential to maximize its effectiveness.