Tax Debts Pose a Significant Challenge for Tax Institutions

Abstract

In 2020, the Tax Administration of Kosovo implemented a tax debt collection reform with three main objectives. 1) Consolidation of personnel from 10 regional offices into a centralized facility; 2) Equitable allocation of work responsibilities; 3) Enhancement of debt collection efficiency. During the period from 2020 to 2022, the implementation of the reform resulted in a substantial improvement in debt collection efficiency, exceeding 100% compared to the pre-reform years. Currently, tax officers handle debt collection cases with well-defined responsibilities and tasks, and the distribution of duty is more fair. This study investigates the involvement of top management and staff in the development and reform of the Kosovo Tax Administration's debt collection function. It also compares its participation with that of other Balkan countries. Tax authorities in developed nations have constructed their tax systems around the concepts of taxpayer self-assessment and voluntary tax compliance. Consequently, each tax revenue agency must establish an environment that facilitates taxpayers in declaring and remitting taxes while also implementing measures to combat informal economic activities and promote legitimate business operations. These efforts are crucial for achieving optimal levels of voluntary compliance and fostering public confidence in the tax administration.