# Albania administrative and fiscal reforms

> Developing situation record from CLSTR: https://clstr.news/situations/albania-administrative-and-fiscal-reforms
> Updated: 2026-11-02T11:41:11.000Z. Sources: 11. Developments: 2.

Albania is undergoing significant structural changes involving both territorial administration and fiscal policy. President Bajram Begaj has decreed Law No. 100/2026, establishing a new administrative-territorial division that reduces the number of municipalities from 61 to 46. This reform, passed by Parliament in October 2026 with 85 votes in favor and 34 against, involves merging 15 existing municipalities into larger units, such as merging Fushë-Arrëzi with Puka and Klosi with Mat. The changes are scheduled for implementation during the local elections on May 9, 2027.

A 16-member Special Parliamentary Commission, including representatives from the Socialist, Democratic, Alliance for Change, and Freedom parties, has been established to oversee the second phase of the reform and ensure compatibility with European Union legislation. However, Democratic Party deputies have criticized the territorial reform, alleging it is intended for electoral purposes and proposing a referendum instead.

Simultaneously, the government has introduced a 2027 fiscal package to increase state revenue. The plan includes raising the standard VAT rate to 21% while reducing VAT on 54 basic food items to 6%. For small businesses, the VAT registration threshold will be halved from 10 million to 5 million lek, potentially adding 17,500 new entities to the scheme. Other measures involve increasing the dividend tax to 15%, raising the profit tax for large businesses to 17%, and increasing tourism VAT to 10%. The government expects these changes to generate roughly 150 million euros annually. These proposals have met with opposition from the Bank of Albania, which warned of inflationary pressure, and opposition members like MP Erisa Xhixho, who alleged the package will increase the burden on the middle class and exacerbate poverty.

## Claims

- The Albanian Parliament approved the law with 85 votes in favor and 34 against. (reported by 5 sources)
- President Bajram Begaj decreed Law No. 100/2026 regarding administrative-territorial division. (reported by 4 sources)
- The number of municipalities will be reduced from 61 to 46. (reported by 4 sources)
- The new territorial division will be implemented in the local elections on May 9, 2027. (reported by 4 sources)
- A 16-member Special Parliamentary Commission has been established to lead the second phase of the reform. (reported by 2 sources)
- The Special Commission includes 9 representatives from the Socialist Party, 5 from the Democratic Party, 1 from the Alliance for Change, and 1 from the Freedom Party. (reported by 2 sources)
- The 2027 draft budget currently treats the 61 existing municipalities as independent financing units. (reported by 1 source)
- Sali Berisha alleged that President Begaj is acting as a notary for the 'Padrino'. (reported by 1 source)

## Timeline

### 2026-11-02: Albania proposes 2027 fiscal package with tax adjustments

Albania's proposed 2027 fiscal package seeks to increase state revenue through higher standard VAT and corporate taxes, despite warnings of inflation and criticism from opposition leaders.

4 sources. https://clstr.news/cluster/albania-proposes-2027-fiscal-package-with-tax-adjustments

### 2026-11-01: Albania: President Begaj decrees new administrative-territorial division

President Bajram Begaj has decreed a territorial reform in Albania, reducing the number of municipalities from 61 to 46, effective for the 2027 local elections.

9 sources. https://clstr.news/cluster/albania-15-municipalities-to-receive-final-state-funds-in-2027

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Cite as: Albania administrative and fiscal reforms. CLSTR, https://clstr.news/situations/albania-administrative-and-fiscal-reforms