The state does not help informal businesses, pandemic into even deeper crisis

These businesses, though they carry out their activity informally by turning away from tax obligations, make up a significant part of the economy in Kosovo.

The D.M. (known name for proofreading), owner of a gastronomy business, is facing more difficulty restoring his business after the damage caused by measures to prevent the spread of the coronary.

We are informal business and no one is interested in how this man is surviving. My workers have reportedly been unemployed in municipalities and received nothing. On June 1st we've resumed work, no one in the municipality has come to ask us how we got through this situation and do you need support”, he says.

According to reports of local and international mechanisms, the informal economy in Kosovo constitutes more than 30 per cent of the Local Production, translated in numbers, is around 1.8 billion euros annually.

Starting again, says the owner of this business, began with great difficulty, since for nearly three months they had not been working hard financially.

Without financial support, continuing his activity in the field of gastronomy, he says, will be a challenge for him.

It's quiet, people don't have much money, they're more careful, they're scared, 50 percent is worse than before pandemic. I compare June to the same month last year and it seems to have very little work. I started with the staff I had. I didn't run from workers. We're hoping that now that we're entering summer season the diaspora comes and the job is open, but my worry is they're not shutting us down again”, he says.

He has not made any application for assistance to local or central authorities, as he is informed that these businesses will not benefit financial assistance from the state.

Kosovo Tax Administration General Director Ilir Murtezaj had told Radio Free Europe that no informal business would benefit from the Emergency Package or the Economic Resiliency Pack.

No business and no informal employees can take advantage of emergency packages or other economic packages because there is no legal basis for profiting”, Murtezaj said, adding that informal business has two sides: if an informal business goes bankrupt then jobs disappear, but if it is on the market it creates uneven competition.

The World Bank's latest report on the economies of Western Balkan countries, which include Kosovo, noted that these are businesses or informal activities that will be more vulnerable to the financial crisis, which will cause the COVID-19 pandemic, but it is even harder to rely on through conventional measures.

According to the World Bank report, the supplementary support tailored to the local context may be necessary to help all vulnerable groups in Western Balkan countries.

Even, business representatives in Kosovo say these businesses have created uneven competition in the market, but now they will be the ones that will be hit most by the crisis, as they will not be able to receive the assistance that will be provided by the state or even by other mechanisms.

The executive director of the American Economic Ode in Kosovo, Arian Zeka, told Radio Free Europe that the pandemic would influence a large number of companies belonging to the informal economy to be hit by the crisis.

The role of the state and those who will assist in this regard is limited because it would be meant to support those who for years have operated contrary to legal provisions”, Zeka has declared.

The informal economy, such as the biggest problems in Kosovo's economy, was also highlighted in the annual European Commission enlargement package, which defines the progress the countries aimed at integration into the European Union.