AI to oversee wage declarations and fiscal transactions in Albania

The Albanian Government announced that future verifications of business wage declarations and fiscal transactions will no longer be conducted by tax officers but through Artificial Intelligence (AI). Prime Minister Edi Rama warned businesses that underreporting wages amounts to theft from pensioners, stressing that such actions deprive retirees of their rightful benefits. If AI systems detect discrepancies in wage reports, businesses will face serious legal consequences, including criminal prosecution.

Why is this important: The pension fund in Albania faces a 500-million-euro annual deficit, driven partly by companies underreporting employee salaries. Many employers and employees engage in informal agreements to avoid paying the full amount of taxes and contributions. This practice limits the government’s ability to raise pensions, a critical issue given the rising cost of living due to inflation. With fewer contributions to the pension system, retirees receive reduced benefits, further weakening an already stressed fund.

Rama called this behavior “theft from pensioners.” He explained that it unfairly shifts the burden onto retirees who rely on these payments. “Every cent that belongs to them must be paid,” he warned, urging businesses to comply voluntarily before stricter measures are enforced.

What was said: During a public address, Rama outlined how the AI-powered system would manage wage audits:

• AI tools will identify companies with suspicious wage declarations.
• Businesses will receive a first warning, giving them the opportunity to correct their reports.
• If inaccuracies persist, the government will initiate criminal proceedings.

“This is not just a government duty but a responsibility for businesses—and for all of us, as children or grandchildren of today’s pensioners,” said Rama. He emphasized that continued evasion would not be tolerated. “This is theft. It’s a harsh word, but it’s the truth.”

Context: The government’s patience with businesses is running out. Rama stressed that compliance is non-negotiable. Alongside Economy Minister Blendi Gonxhja and State Minister for Business Delina Ibrahimaj, Rama met with business leaders to underline that wage transparency is essential to maintain the pension system.

He further warned: “AI will catch inconsistencies, and companies will be given only one opportunity to correct their mistakes. If not, they will face legal consequences beyond administrative penalties.”

This issue is especially critical as the pension system struggles under the dual pressure of mass emigration and an aging population. With fewer workers contributing and the cost of pensions rising, immediate action is needed to protect pensioners from further financial harm.