Albania enlists EY to combat tax evasion and economic crime

Albania – a candidate country for EU membership – has called in Big Four professional services firm EY to help combat pervasive tax evasion and stamp out a black economy worth a third of its GDP.

The world’s largest consultancies, including EY, have had a presence in Albania for years. Strategically located in the southwest Balkans, the country is one of many former Eastern Bloc nations that has opened up to business and applied for EU membership since the collapse of the old order.

Yet despite joining NATO in 2014, EU accession talks have repeated stalled. Albania remains beleaguered by problems with organised crime, drug trafficking and political instability related to historic Balkan strife. Keen to get a grip on the situation, Albanian prime minister Edi Rama has signed a deal with accounting and consulting firm EY to help the government crack down on a wide range of economic crimes.Details of the contract are still scarce. Rama, a former mayor of Tirana and successful painter, has said a team of high-level American and German experts from EY will work closely with the country’s interior and finance ministries. A US national and former FBI employee will lead the EY team, assisted by a German with high level experience in the economic crime unit of Europe’s largest economy.

"We have done a lot but we feel the need to do much more. There is still money out there that belongs to the people and the country and is now not where it should be,” said Rama.

Revealing the scale of the problem, one official added that police have frozen assets worth €10 million in the past five years. The black market is said to be worth a third of the country’s GDP, while a 2017 study revealed that tax evasion carves out an €800 million hole in the economy, equivalent to 8% of GDP or six times the entire defence budget.

Like Big Four counterparts Deloitte, KPMG, and PwC, EY is no stranger to former Eastern Bloc markets. The consulting firm has written substantial reports on transparency and new VAT rules in Albania, and recently promoted Aurelia Costache as head of its Business Advisory unit in Romania.