Second Environmental Performance Review of Albania

67Chapter 5ECONOMIC INSTRUMENTS ANDEXPENDITURES FOR ENVIRONMENTALPROTECTION5.1 Current situationAlbania’s environmental management is basedmainly on command and control regulatoryinstruments (permitting, inspections), althougheconomic instruments have been strengthened insome areas since the first EPR. The latter are usedlargely as income generators although there are caseswhere their structure supports environmentalobjectives. It is important to strengthen existinginstruments and to establish new ones or re-establishabolished ones.Despite a rather difficult macroeconomicenvironment, environmental expenditures andinvestments in key areas, as reflected in the budgetsof MoEFWA and MoPWTT, have increased.Whatsoever, expenditure on environmentalprotection remains low in the Government’s budget.5.2 Legal and institutional frameworkThe general provisions of the 2002 Law onEnvironmental Protection, No. 8934, define theunderlying principles of environmental protection,including the “polluter pays” principle andrehabilitation of sites damaged by industrial andother economic activities.The main laws for environmental taxes are the 2008Law on National Taxes, No. 9975, and the 2006 Lawon Local Tax System, No. 9632. Both laws weresignificantly amended in 2011, as discussed later inthis chapter. Article 3 of the 2008 Law on NationalTaxes, “Types of National Taxes”, defines the typesof environmental taxes. Environmental fines arebased on two amendments (2008 and 2009) of the2002 Law on Environmental Protection. ForestryPolice fines are in accordance with article 8 of the2005 Law on Forests and the Forestry Service, No.9385. Local government tariffs for environmentalclean-up follow the 2008 Law on TaxationProcedures, No. 9920, as well as the 2006 Law onLocal Tax System, No. 9632.The General Directorate of Customs, through itsdistrict branches for the importation of used vehicles,is the tax agent for imported fuel. The GeneralDirectorate of Tax and Tariffs is responsible throughits branches for domestically produced fuels. TheGeneral Directorate of Customs was the tax agentresponsible for imported vehicles through its districtbranches before the abolition of import taxes on usedvehicles.The General Directorate of Customs is theresponsible authority for the plastic packaging ofimported liquids. The General Directorate of Tax andTariffs is responsible for plastic packaging ofdomestically produced liquids.MoEFWA and MoPWTT are the key ministrieschanneling State budget resources in environmentalexpenditures and investments.While the Ministry of Finance controls the system oftaxes and fees, MoPWTT is reviewing all transportrelatedlegislation to align it with the EU acquis,while MoEFWA and its agencies bear responsibilityfor the NES. MoPWTT, through its GeneralDirectorate for Road Transport Service, is alsoresponsible for the registration of imported vehicles.MoETE and its subordinate agencies also take part inadministering the national regulations for fueleconomy.5.3 Economic instrumentsThe country has made moderate progress since thefirst EPR. Only a limited range of pollution chargesare utilized, although there are relevant stipulations inthe 2002 Law on Environmental Protection.Environmental taxation, one of the most widely usedmethods of economic incentives to change behaviour,is used in Albania. Certain forms of environmentaltaxation have been applied in an attempt to alterpolluting human behaviour or choices by imposingtaxes that can be avoided, or diminished, by moreenvironmentally friendly behaviour or choices.