Annual Report on the Implementation of Annual Working Plan ...€¦ · Financial Intelligence Unit (FIU) ... Department of Macroeconomic Policies and International Financial Cooperation

Annual Working Plan of MF (AWPMF) 2018

Prepared by EIPCD Page 1 January – December 2018

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Republika e Kosovës

Republika Kosova - Republic of Kosovo

Qeveria - Vlada - Government

Ministria e Financave

Ministarstvo za Finansije - Ministry of Finance

Annual Report on the Implementation of Annual Working Plan of

Ministry of Finance (Narrative) – AWPMF 2018

Reporting period January – December 2018



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Përmbajtja:

Contents Përmbajtja: ...................................................................................................................................... 2

1. Kosovo Customs (KC) ................................................................................................................ 3

2. Tax Administration of Kosovo (TAK) ....................................................................................... 4

3. Financial Intelligence Unit (FIU)................................................................................................ 6

4. Central Procurement Agency (CPA) .......................................................................................... 8

5. Treasury ...................................................................................................................................... 9

6. Budget Department (BD) .......................................................................................................... 10

7. Department of Macroeconomic Policies and International Financial Cooperation (DMPIFC) 13

8. Fiscal Policy Department and Financial Markets (FPDFM) .................................................... 15

9. Property Tax Department (PTD) .............................................................................................. 16

10. Central Harmonization Department (CHD) ............................................................................ 17

11. Internal Audit Department (IAD) ........................................................................................... 19

12. Central Department of Public Private Partnership (CDPPP) .................................................. 19

13. Legal Department (LD)........................................................................................................... 20

14. European Integration and Policy Coordination Department (EIPCD) ................................... 21

15. IT Systems Management Department (ITMD) ....................................................................... 24

16. General Service Department (GSD) ....................................................................................... 25

17. State Aid Department (SAD) .................................................................................................. 27

18. Public Communication Division (PCD) ................................................................................ 28

19. Procurement Division (PD) .................................................................................................... 29

20. Financial Reporting Division (FRD) ..................................................................................... 30

21. Budget and Finance Division (BFD) ..................................................................................... 31



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1. Kosovo Customs (KC)

During period 01.01.2018 until 07.12.2018, Kosovo Customs realized revenues in value of

1,053,161,409.80€, which compared to the revenues from same period of last year which were

1,033,546,016.20€, revenues were realized for about 1.90 % more.

Monitoring of proper implementation of classification of goods, origin rules, goods assessments

and as result were addressed 140870 statements profiled in red and yellow channel.

In red channel were selected 67173 statements for physical control of goods, and were inspected

after customs 68291 statements, where as result only in SIACC (sector of inspection after customs

clearance) were reassessed 737 statements.

As result of a process within KC level, were initiated 1987 offences in total, as direct result of risk

profiles and control in customs clearance stage, in which occasion customs value was increased as

well as considerable quantity of goods which violates the Intellectual Proprietorship Rights (IPR)

were confiscated.

With purpose of right implementation of SAA, during reporting period various activities took

place, as: replies through e-mail on requests, meetings with entities for necessary clarifications,

visits of entities, 4760 SAD were examined regarding right application of SAA, as well as full

support was provided to reference points within and out of Customs. Out of parameters from 3.5%

to 4.5%, sixth assessment method was applied about 2.92%.

In the activity of excise administration, there was an increase of activities at relevant sectors,

regular visits and various actions were conducted at companies which are subject of internal excise

as well as businesses of games of chance, where as result the number of visited (controlled) entities

of excise sector is 83, whereas the revenues from internal excise are 9,531,632.54 €.

Sector of Games of Chance conducted 930 controls of premises and 30 joint activities with TAK,

Police and rule of law sector, and realized the revenues in value of 14,478,742.33 €.

Economic Impact and Procedures Department also had its regular activities, according to reported

actions, regular visits were conducted at entities which entitles authorization of procedures with

economic impact as customs warehouse, internal processing, processing under customs control,

and as result were conducted 205 regular visits and 216 visits for taking of samples.

Regarding the second objective, during this period were conducted activities related to

strengthening of sources within Intelligence, Smuggling, Investigation and Monitoring and Risk

Sectors.

In the activity of risk management were activated 131 specific profiles, 314 were modified, 77

were de-activated and adjourned 4165 entities in selection lists. As result, during this period were

realized 971 patrols in green line and other parts of the internal territory, 500 controls with

equipment were conducted and as result were discovered 30 kg narcotic of type Cannabis sativa

and in 5 cases various medicaments hidden in modified spaces for smuggling. The investigation

initiated 53 new cases within reporting period, and 45 criminal charges were filed.



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Regarding reporting period were addressed and approved 16 new requests about 70 trademarks,

whereas for extension of deadline were addressed 94 requests for 379 trademarks.

In lack of additional information 4 requests were rejected for customs action. In the activity of

control compliance after customs clearance were conducted 222 controls. Conducted controls in

all selection channels, 32 resulted with findings according to minutes on customs offence, 24

conducted controls at BCP in frame of 16 operation plans.

During the reporting period in continuity were undertaken activities, actions and meetings which

strengthen the compliance in field of bilateral cooperation with Customs Administration of EU

and other states, as consequence were 119 correspondences exchanged with other customs

administrations, and 20 of them were correspondences with EU countries. There were regular

reporting to European Commission, EU Office and MEI, as well as regular reporting required by

WCO (world customs organization), and participation in meetings and conferences organized by

WCO.

During reporting period in PSE were presented 146 asset statements of customs officers, 9 received

disciplinary cases and 10 investigated cases, 45 inspections were conducted in the field (BCP and

ZBD) as well as systems inspections, also recommendations were delivered about improvement

of working procedures.

2. Tax Administration of Kosovo (TAK)

TAK managed to ensure to the taxpayers education, information, and facilitation for procedures

of providing professional, transparent and efficient services pursuant to tax legislation.

During reporting period were finalized 4 concept documents for Laws as;

Personal Income Tax,

Corporate Income Tax

Value Added Tax, and

Law on Tax Administration and Procedures,

Law on Games of Chance

During 2018 were received 427 requests for VAT reimbursement. Regarding further improvement

of electronic system on collection of tax incomes during this year, the number of

businesses/taxpayers that have used Electronic System EDI in order to deliver purchase/sales

online is 12,813. In total taxpayers who have submitted Purchase Register are 12,485 and taxpayers

who have submitted Sales register are 12,364.

During reporting period, regarding international agreements on elimination of double taxation,

we’ve received positive answer on initiation of negotiations with Portugal, Netherland, Italy and

Finland.

The amount of tax incomes collected for period January-December 2018 is 434,324,664.42 million

€, whereas Pension Contributions are amounted to 148,300,043.00 million €.



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During reporting period, with aim to combat tax evasion, various operation activities took place

as: 43,810 visits, and 1,563 controls. The results of these activities provided 121,598,343.32€ extra

turnover, 3,623,028.53€ decrease of VAT crediting, 8,244,199.88€ extra tax, 5969 penalties

amounted to 1,430,325 €; 2,565 employees identified as registered; 509,624.06 € the value of

identified goods without origin.

During 2018, the amount reimbursed during January-December 2018 for reimbursement – refund

of Value Added Tax; Personal Income Tax; Corporate Income Tax and pension Contributions is:

- The amount required for all types of tax is 63,464,807.24 €;

- Approved amount for all types of tax is 46,811,437.25 €

- Transferred amount on taxpayer account is 38,605,012.53 €

- Amount under obligation at TAK is 6,818,065.18 €

- The Amount in PC/Pension Trust and refund in PT is 1,388,358.7 €

Regarding full automation of VAT reimbursement process, during reporting period we’ve realized

technical assistance supported by IMF which aimed the assessment of latest developments in tax

reimbursement field of activity and support for full automation of VAT reimbursement process.

Also, from fiscal coupons collected during reporting period, the number of citizens who benefited

was 6,711, whereas reimbursed amount was 6657,024.97 €.

During reporting period were fiscalised 2,210 businesses or about 18% more compared to 2017,

and in total 3,511 installed FEE.

The amount of debts collection for reporting period is 71,225,060 million euro (until12/12/2018).

Whereas in the same period of 2017 were collected 63,674,373.16 euro, 7,550,687 euro or 11%

more collected debts in 2018.

We developed the system for electronic management of whole reimbursement process in TAK.

As process starts by receiving electronic request from taxpayer through tax statement, where

afterwards every activity of relevant officials up to the generation of payment order at Treasury, is

completely formatted within information system. Also, this is an electronic service which is in

disposal of taxpayer, who files a request for reimbursement, as: for Value Added Tax, Personal

Income Tax and Corporate Income Tax. Through this service, the taxpayer might be informed

about the stage of review of his request by TAK, his reimbursement request filed in advance. More

respectively through service Management of Reimbursements, taxpayer might be informed about:

Date of reimbursement request, required value, type of tax, status of request review (pending,

completed, and refused). The categorization of taxpayer according to Internal Regulation of TAK

A, B or C, date of completion, and approved value (“amount”).

In total, 12,813 taxpayers have used service “Online register of purchase and sale”.

According to working plan, we’ve developed, tested and functionalized information on

management of reporting FATCA, according to requirements of IRS of United States of America.

This system enables reception of reports form Commercial Banks in Kosovo in format and

communication channels according to technical requirements of the Authority. Also, the system

enables the validation and mutual communication between Commercial Banks and TAK system,

as well as two direction communication TAK IRS/IDES in the United States of America.



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As project has been realized completely within time limits and budgetary cost.

3. Financial Intelligence Unit (FIU)

In Annual Working Plan of Ministry of Finance (AWPMF) for 2018, were determined six (6)

strategic objectives, which aims prevention of money laundering and combating financing of

terrorism.

Out of 19 activities in total from this working plan, during 2018 FIU implemented in total 18

activities or about 96% of working plan. Whereas 1 activity, didn’t start to be implemented.

During 2018 in total were accepted 10,592 reports;

In May 2018, FIUF-K drafted typologies of Money Laundering from politically exposed persons

in Kosovo, which were published in: http://fiu.rks-gov.net/ëp-content/uploads/2018/06/PEPs-

Typologies_ALB-SRB-ANG.pdf.

In frame of Promoting the prevention of money laundering and financing of terrorism and

intensification of compliance oversight, FIU-K conducted following activities:

Achieved percentage on drafting and implementing annual plan on compliance oversight

is 77%;

Number of oversight activities 16;

Assessment of sectorial specific risk was conducted on prevention of money laundering

and financing of terrorism regarding casinos and games of chance, construction and

immovable properties, and risk assessment within NPO sector.

The three assessments of sectorial risks were finalized in K2, approved by Board of FIU-K, and

approved by Government Decision No. 10 and 11/52;

In total were addressed 38 reports about suspected cases of extremism and radicalism;

Regarding development, standardization and intensification of reporting processes,

intelligence, analyzes, and promotion of agencies cooperation for the disclosure and investigation

of money laundering and financing of terrorism, as well as confiscation of revenues from crime,

FIUF-K conducted following activities during 2018:

FIU-K, conducted following activities:

Periodic assessment of Cash transactions reported by entities;

About 6501 reports were received and controlled by IT during 2018;

In total 539 reports were returned back regarding improvement of reporting quality;

In total 6501 reports were received during 2018;

Number of received suspicious transactions reports for ML (RST), is 590;

Number of received suspicious transactions reports for FT (TFR) is 9;

Number of received reports on Cash transactions (CTR) is 2,247;

Number of intelligence reports distributed to mandated authorities is 105;

Number of requests for received information from national authorities (IRD), is 147;



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Number of requests for information distributed to domestic authorities (ORD), is 2,326;

Number of issued instructions and suspended transactions is 4;

The value of suspended/freezed transactions is 250.000,00 €;

TAK tracked 16 feedbacks to FIU-K. Whereas, National Coordinator tracked a Court decision on

Sentence for ML;

FIU analyzed 38 reports for individuals or extremists groups which presents potential risk.

Regarding the development of legislation on PML/CFT and FIU internal standards and ensuring

of its efficient implementation, FIU-K conducted following activities:

FIU-K approved 5 sub-legal acts

In December FIU-K drafted the plan of sub-legal acts for approval in 2019;

The percentage of achievement on the implementation of Action Plan for the

implementation of legal provisions of Law No.05/L-096 is 56 %;

FIU-K approved following sub-legal acts:

Guidance FIUAD: 40/2018

Guidance FIUAD: 70/2018

Regulation on FIU-K internal organization

Administrative Instruction on maintenance of statistics for PML/CFT No.01/2018, and

Administrative Instruction on Politically Exposed Persons PEP- MF (FIU), No. 02/2018.

In frame of International Cooperation for Prevention of Money Laundering and Financing

of Terrorism, FIU-K conducted following activities:

FIU-K participated in plenary meeting of Egmont Group and mediate meeting. Meetings were held

in March and September 2018;

-Meetings were held with over 30 counterparts’ international units. Furthermore, FIU-K

participated in trainings of Egmont Group;

-FIU-K wasn’t invited to participate in meeting of regional FIU/s held in October 2018 in Sarajevo,

Bosnia and Herzegovina. This seems to be due to political reasons;

-FIU-K signed MoU with Senegal and Jordan;

-FIU-K held meetings with counterpart units in Australia, Argentina and South Korea.

-Whereas in November participated in meeting of Balkan and Baltic Countries held in Tirana-

Albania;

-Number of received requests for exchange of information is (IRI), 28;

-Number of filed requests for international exchange of information (ORI) is 60;

-Number of spontaneous submitted reports to other international FIU/s is 10;

- Number of spontaneous received reports from other international FIU/s is 12.

During reporting period, FIU-K recruited two officers;

FIU-K officers have participated in 45 trainings, whereas for specialized domestic and

international trainings, the number of trainings, conferences, seminars for the field of contra

extremism, radicalism and terrorism were 5;

Successfully was completed the upgrade of software GoAML, and in continuity old servers were

changed by new ones;



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There was an assessment of the need for the access on data base of institutions at KACA;

Opportunity of the access to data base of other institutions. FIU has access in Police, Customs,

KBRA, Vehicle registration, TAK, NGO register, and recently even at Civil Registration Agency.

4. Central Procurement Agency (CPA)

During reporting period, CPA considers that achieved saving within realized contracts is about

8%.

CENTRAL PROCUREMENT AGENCY

Procurement activities until

10.10.2018

Centralized procurements

Title of Contract

Date of

Contract

Signature Contracted

Type of

Contract Status

1 Photocopy services, Lot. 1 27.02.2018 3,726,000.00 Lease

Contract Contracted

2 Photocopy services, Lot. 2 27.02.2018 1,827,000.00 Lease

Contract

Contracted

3 Supply with liquid derivate, lot. 6 01.03.2018 2,551,872.73 Framework

Contract

Contracted

4

Supply with various official

materials, lot. I 23.04.2018 83,816.96 Framework

Contract Contracted

5


materials, lot. II 23.04.2018 18,892.30 Framework

Contract Contracted

6


materials, lot. III 23.04.2018 16,298.10 Framework

Contract Contracted

7


materials, lot. IV 24.04.2018 20,817.00 Framework

Contract Contracted

8


materials, lot.VI 23.04.2018 16,552.35 Framework

Contract Contracted

9


materials, lot. VII 23.04.2018 16,683.90 Framework

Contract Contracted

10

Long-term usage of rented

vehicle, category 3, Lot 2 27.03.2018 1,281,749.04 Lease

Contract

Contracted

11 Cleaning services 25.05.2018 533,000.00 Framework

Contract

Contracted

12

Long-term usage of rented

vehicle, category 2,lot 1 and 2,

annex 01.06.2018 458,040.00 Lease

Contract

Contracted

13


materials, lot. V 01.06.2018 11,043.98 Framework

Contract Contracted

14 Supply with fuels, lot V 05.07.2018 2,033,213.22 Framework

Contract Contracted

14 IT supply

9,000,000.00 Under

assessment



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15

Supply with passengers vehicle,

lot 1 04.10.2018 593,670.00 Framework

Contract Contracted

16


lot 2 05.10.2018 348,771.67 Framework

Contract Contracted

17 Transport services- air tickets 23.11.2018

5,037,500.00 Framework

Contract Contracted

18

Vehicles Category I, lot 1 and 2,

Annex contract 10.10.2018 244,530.00 Lease

Contract

Contracted

19 Mazut supply 23.11.2018 3,196,085.20 Framework

Contract Contracted

20


lot 1. 27.11.2018 357,600.00 Framework

Contract Contracted

21 Photocopy services for local level 2,000,000.00 Under

assessment

22 Supply with fuel derivate 35,000,000.00 Under

assessment

23


lot 2.

Under

proceeding

Contracted

23,000,000.00

Under

proceeding

46,000,000.00

5. Treasury

In regard to accountancy plan pursuant to GFSM 2014 it has to be highlighted that is ongoing.

A Guidance has been prepared on commenting economic codes of existing plan as well as

interconnection table has been finalized between current accountancy plan and classification with

governmental financial statistics published in 2014 (GFSM 2014),

It is worthy to mention that it is in process the preparation of securities schedule for 2019. Initial

draft has been completed along with tracking documents, currently is expected to be finalized and

submitted for the approval to the Minister.

Also, Concept Document on State Debt has been finalized and along with other tracking

documents has been submitted to the Government for approval.

The draft of new Law is expected to be finalized within this year and presented in front of task

team for discussion and finalization of draft law.

Review of three regulations will continue besides the process of approval of new Law on State

Debt, whereas as process could be finalized after approval of the Law.

In frame of upgrading and developing of Public Finance Management System (KFMIS), was

signed a contract for development of module for processing of online payments - RTGS, and we’ve

reached the stage of payment testing, whereas until the end of the year it is expected that whole

project will be implemented, and on 1st January 2019 will be live (“online”).



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We’ve configured the system of attaching documents at KFMIS in purchase order module, ground

part of the Contact and module of expenditure with invoices.

In regard to upgrading of hardware and software capacities, and IT security for Treasury,

the bids have been assessed, winning company was enounced, the contract has been signed, and

we’re awaiting on equipment lifering.

After the refusal of request for placing equipment at CBK and TAK in Prizren, along with

Management it was decided to temporarily place the equipment in ISA.

In regard to upgrade of wages system- Payroll and processes advancement, a contract was

signed on extension of maintenance of wages system.

IT has prepared the server based on wage administrator’s requests and implementing company.

It is planned that new version (upgrade) will be completed until the end of year and go live on 1st

January 2019.

Drafting of Procedure/Regulation on wages system is an activity carried forward to 2019.

With purpose of developing the Cash Management System, Treasury is negotiating with

company Free Balance about the opportunity of developing extra module on cash planning.

In regard to Upgrade of State Debt Management System - CS-DRMS, in new version 2.0,

Treasury reports that it was informed by Management that Commonwealth is developing new

platform of this system, whereas it has been recommended to directly go on this platform, which

will be ready in the beginning of 2019.

At the same time we have been informed by Commonwealth that they’re finalizing the contact

with a company which will be engaged for technical support of system CS DRSMS.

6. Budget Department (BD)

1. Drafting of Draft Law of Budget of Republic of Kosovo for 2019 and assessments for

years 2020 -2021

In frame of drafting document of Mid Term Expenditure Framework 2019-2021, following

activities took place:

- It has been worked on drafting the instruction for MTEF as preceding document of process of

drafting of Budget for 2019-2021. Activities took place about holding internal meetings of

Ministry of Finance and meetings with Grants Commission.

- On 09 January 2018, draw selection was completed about new members of Grants Commission

for four Mayors of municipalities, as follows: Fushë Kosovë, Drenas, Mitrovicë and Leposaviq for

2018.

- Kosovo Government by Decision No.08/36 dated 16.03.2018 has approved the report on suitability

assessment of Municipal Financial System for 2017.

.



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- On 23 February 2018 documents were submitted to the line Ministries; MALG, MLSW and at

MH, MEST, in regard to proposal of specific grants for education and health and other municipal

funding, for approval by Grants Commission in order to finalize MTEF 2019-2021 pursuant to the

LMPFA and LFLG.

- Grants Commission in meeting held on 12 April 2018 has approved government grants on

municipalities funding for 2019 in contest of finalizing MTEF 2019-2021 including criteria and

grants allocation according to LFLG.

- Early assessments according to budgetary organization were completed in regard to activities and

new policies for inclusion into MTEF 2019-2021 and on 27.04.2018 the Government approved

Midterm Expenditure Framework 2019-2021.

- On 12- 13 July 2018 there were consultation meetings with Directors fir Budget and Finance as

well as Main Financial Officers of Municipalities, regarding expenditure structure for 2019-2021

on Municipal Budget.

2. Realization of Budget during 2018

- After approval of the Law No.06/L-020 on Budget of Republic of Kosovo for 2018, Budget

department registered into Kosovo Finance Management Information System (KFMIS) approved

budget for 2018 for execution.

- Issuing of instruction No.64 dated 11.01.2018 “Implementation of Article 9 of Law No.06/L-020

on Budget of Republic of Kosovo for 2018.” Based on Instruction issued for all Budgetary

Organizations, all received requests from Budgetary Organizations have been and changes have

been included on budget table for the fulfillment of incomplete financial obligations of multi-

annual capital projects against economic contractors from 2017 to 2018.

- These changes in capital projects have been approved by the Government of Republic of Kosovo

by Decision No.06/29 on 13.02.2018, and tables with changes were proceeded to the Assembly of

Republic of Kosovo for information.

- In KFMIS were executed changes of capital projects for the implementation of Article 9 of Law

No.06/L-020 for Budget of Republic of Kosovo for 2018 after approval by Kosovo Government.

- After the approval of Budget for 2018 import of budget for Suhareka, Lipjan and Kamenica

municipality was completed in system of Free Balance.

- From unforeseen costs were executed in total: 45 Government Decisions and 6 Minister’s

Decisions.

- After justification of requests were executed in KFMIS 172 requests for transfer and 89 requests

for reallocation of funds of budgetary organizations.

- Own source revenues were carried forward from 2017 to 2018 for central level in the system of

Free Balance in amount of 2,771,889.37 euro.

- In KFIMS were executed 38 requests of municipalities for the transfer of funds from Unspent Own

Source Revenues from 2017 to 2018.

- In KFIMS were executed requests of municipalities about increase of budget for 2018.



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3. Budgetary Impact Assessment for draft laws and other legal and sub-legal acts as

well as strategic documents

Based on Government Working Plan and Law on Annual Budget, all received requests form

proposing institutions of new legislation or amendment and supplement of current one, as well as

of strategies for providing of independent opinion of Budgetary Impact during January –

December 2018, Budget Department has prepared and submitted to the proposers in total 162

independent opinions, as follows; 85 – draft laws; 10-Strategies; 24 – Draft regulations; 33-

Concept Documents; and 10 – Administrative Instructions.

4. Publishing of documents

In the official website of Ministry of Finance during January-December 2018 following

documents were published: Law No.06/L-020 for the Budget of Republic of Kosovo for 2018,

Manual for Citizens for Budget of 2018, and Mid-term Expenditure Framework 2019-2021

Budgetary Circular 2019/01, Budgetary Circular 2019/02 for municipalities, Budgetary Circular

2019/02 for budgetary organizations of central level.

5. Other activities

Preparation of PIP system and execution of procedure of end year under administration of

PIP system what it means the closure of system for execution 2017 Planning 2018 and

opening of system for execution 2018 Planning 2019.

Reconciliations in Budget of 2017 for all expenditure categories for sub economic

categories (according to five digit code) with tracking tables during fiscal year with Free

Balance.

Meetings with representatives of IMF took place about planning, execution (changes in

budget) for last 5 years and discussions for AI draft for transfers and reallocations.

Preparation of summary report of monitoring of physical and financial progress of

capital projects for January-March 2018 for the projects with value over 1,000,000 euro,

in total distributed into years, for all budgetary organizations, based on reporting from

BO in PIP system for capital individual projects.

Training for municipal level took place on budget planning in electronic systems BDMS

and PIP on 28- May, this training was supported by USAID along with all necessary

conditions for training. In total participants in the training were 162 municipal officers,

where 91 of them for BDMS system, and 71 officers for PIP system.

Consultations with all BO and providing of recommendations about budget planning in

BDMS system according to first budgetary circular 2019-2021.

Consultations with all BO and providing of recommendations about planning of capital

projects in PIP system according to first budgetary circular 2019-2021.

Trainings for BDMS and PIP systems for planning and monitoring module for all new

officers of budgetary organizations of central level.

Collection and systematization of data about budget performance.



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Preparation of summary report of monitoring of physical and financial progress of

capital projects for January-June 2018 for capital projects with value over >= 1,000,000

euro, in total distributed into years, pursuant to Law No.06/L-020 for Budget of

Republic of Kosovo for 2018, Article 17 item 3.

Monthly analysis of wages and other expenditure categories for all budgetary

organizations.

Preparation of funding the capital city pursuant to Law on Capital City.

Preparation of funding Obiliq Municipality pursuant to Law on Obiliq.

From 17.07.2018 to 20.08.2018 a workshop was held about drafting of concept document

of Law on Finance of Local Government (LFLG).

Budgetary Impact Assessment was prepared on concept document of LFPL.

Consultations with all BO and providing of recommendations about reporting on capital

projects according to PIP system of projects monitoring.

On 23 August 2018 a meeting was held with North Municipalities about budget process of

2019, challenges and current progress.

Preparation of action plan about obligations which derives for Budget Department from

the plan of implementing of RVA recommendations.

7. Department of Macroeconomic Policies and International

Financial Cooperation (DMPIFC)

Macroeconomic division

During January it was completed drafting of National Program for Reforms in Economy, and final

document was forwarded to Government for approval. On 31 January (within time limit) was filed

at European Commission. Assessment meetings of European Commission for NPER submitted in

January were held with delegations from Central European Bank and European Commission

(ECFIN) and positive comments were received about this document.

During April it was finalized and submitted for approval at Government MTEF 2019-2021, an

integral part of which it is even macro-fiscal framework. Apart on drafting of the framework,

Macroeconomic Unit was responsible even for the coordination of activities between Budget,

Strategic Planning Office (it was included on drafting the Priorities Statement) and other actors.

In June was launched the Program for Reforms in Economy for 2019.

In October was prepared macro-fiscal framework as part of Law on Budget 2019.

In November PER 2019 was delivered which will be published for public consultation.

Regarding other months, macroeconomic statements were published for Q1, Q2 andQ3 2018. This

statement presents a concise summary of developments for main indicators in Kosovo’s economy

during provided period.



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During this year, in continuity was followed the report of Government revenues and expenditures,

as well as reports were drafted on performance of incomes and expenditure for each month, and

delivered to the cabinet for information. Also, regularly it was updated the model of

macroeconomic projections with data published by CBK and KSA, as well as from International

Institutions.

A series of meetings were held with various representatives of International Monetary Fund and

World Bank in order to discuss macro fiscal projections in MTEF, NPER, Budget, etc.

During this period regular reports were updates as: NPISAA, SAPD, GWAP, AWPMF, PFMRS

etc. Representatives of macroeconomic unit participated in ministerial and inter-ministerial

working groups according of requests.

Division for International Financial Cooperation:

Financial Agreements of grant were signed in value of 160.776 million euro, for 13 various

projects, with European Union, KfW, German Government, Luxemburg Government, EBRD, and

World Bank.

Projects includes:

EU Grant for Route 10 Rail Rehabilitation, Segment 1- Hani i Elezit – Fushë Kosovë,

Agreement for Energy Sector Program, Stages VIII and IX- Improvement of Central

heating of city in Prishtina,

Agreement on Professional Services of Recipient in frame of Program II of Waste

Management,

Project for extension of improvement of property tax system “Pro Tax 2”

Management program of solid waste in Kosovo – investments within 4 landfills under state

ownership,

Removal of wastewater in South-West Kosovo – Stage V for municipalities of Peja,

Gjakova, and Prizren,

Enlargement of Termokos network in Pristina,

Enlargement of drinking water network and sewage in rural zones – Stage 6 (Exit) of

project,

Development of internal procedures for approval – Regional Routes Project,

Support of Credits Guarantee Fund – opening of jobs in agriculture sector,

Protocol on technical and financial cooperation with German Government 2018-2019

Grants from World Bank for various projects

EU Grant for Route 10 Rail Rehabilitation, Segment 2 Fushë Kosovë – Mitrovicë

Whereas, another 8 loan agreements were concluded in sector of roadway and water infrastructure,

treatment of wastewater, and internet access, in value of 123 million euro, with creditors as

Austrian Government, EBRD, and World Bank:

Construction of roadway segment Kijevë - Zahaq of Highway Pristina-Peja,

Agreement for project of treatment of wastewater in Podujeva municipality,

Construction of water supply scheme in Ferizaj municipality,

Construction of water supply scheme in Graçanica municipality,

Construction of water supply scheme in Istog municipality,



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Treatment of wastewater in Shtime municipality,

Digital economy in Kosovo – enlargement of internet network within rural zones.

All signed financial agreements are for projects of priority list projects, approved by National

Investment Council. Updated list in the second semester of 2018, in order to add projects which

have been reflected even in Mid-term Expenditure Framework and Budget.

In April 2018 it was prepared a report on Implementing of Investment Clause, which has been

approved by Kosovo Government and forwarded to the Assembly of Kosovo for information.

Also, during preparation of Mid-term Expenditure Framework, Budget Tables for 2019, as well as

the Report on Reforms in Economy for 2019, Investment Clause Tables were updated including

some of new important projects, mainly in environment, infrastructure sectors, etc.

2 METD were signed and ratified with Austria and Great Ducat of Luxemburg. Two agreements

are awaiting the ratification of respective countries in order to enter into force. Negotiations on

METD were initiated with following countries: Qatar, Kuwait, Italy, Portugal, Holland, Sweden,

and Slovenia. Whereas negotiations for METD were concluded with Belgium, Lithuania, Malta,

and Latvia.

8. Fiscal Policy Department and Financial Markets (FPDFM)

During reporting period from Fiscal Policy Department and Financial Markets, achievements are

as follows:

- Update of incomes in Local and Central level for period January–December 2018 on

Property Tax, Royalties, Municipal Non-tax incomes.

- Update of incomes from TAK and Customs for January-December 2018,

- Report for monitoring of conclusions of SAA sub-committees for 2017-2018-2019.

- Analysis of budgetary impact according to decisions 13/07 and 14/07,

- Analysis over fiscal impact from Government decisions on tax exemptions, excise and

VAT for manufacturing entities for January-June 2018,

- Preparation of inputs for EC Report for Kosovo for 2018,

- Preparation of incomes from excise on games of chance, January-December 2018.

- Participation in meetings for coordination of Investment Reforms Regional Agenda,

respectively national plan,

- Analysis for exemptions on import as well as participation of customs-excise and VAT in

total imports,

- Analysis of fiscal impacts 2015-2018.

- Analysis of impact of excise on tobacco and excise on oils for heating,

- Exemptions on import for manufacturers – importers according to TAK 2015-2018,

- Number of new registered businesses in VAT and Number of new registered businesses in

VAT 2011-2018.



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9. Property Tax Department (PTD)

Data base of billing 2018 was prepared. Property values were set in the system, tax rates and tax

zones which have been approved by municipal assemblies, based on their regulations approved

during 2017 for the tax year 2018.

Total calculation of bills was conducted for all municipalities for the tax year 2018. In total were

produced 647 thousand bills which reaches the amount of assessed tax of 26,840,362.09 €.

Under the implementation of Article 21 of Law No.03/l-139 dated 26.03.2009 “On Expropriation

of immovable property” amended in frame of Central Level were received and reviewed 38 (thirty

eight) projects, respectively assessment request.

Under the implementation of Article 21 of Law No.03/l-139 dated 26.03.2009 “On Expropriation

of immovable property” amended in frame of Municipal Level were received and reviewed 46

(forty six) projects, respectively assessment request.

Pursuant to Law No.04/L-144 on allocation for use and exchange of immovable property of the

municipality, according to initiated requests for the assessment of property for exchange were

received and reviewed 25 (twenty five) projects, respectively requests.

In frame of Central level were drafted and finalized assessment acts for 33 (thirty three) projects,

respectively assessment request.

In frame of Municipal level were drafted and finalized assessment acts for 44 (forty four), projects,

respectively assessment request.

In frame of properties assessment according to initiated requests for the exchange of municipal

property with legal and natural persons, were drafted and finalized assessment acts for 18

(eighteen) projects, respectively requests.

Aiming to upgrade capacities of municipal officials, trainings were held regarding:

1. Use of online application for registering of immovable properties (objects) and taxpayers,

as a result of automation of property tax system. The number of trained officials was 109

questionnaire officials for all municipalities.

2. Training for improvement of objects coordinate registered erroneously within

municipalities. In training were included 25 municipalities, the number of participants in

training was 60.

3. Three days training was held about planning of reassessment of agriculture premises as

well as about calibration of level for values of land for the final assessment of lands.

Training was managed by Swedish experts, including the division of mass assessment,

private assessors engaged in frame of project ProTax2 and the other staff engaged in frame

of the project.



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During 2018, based on plan of project “Pro tax 2” and needs of Property Tax Department,

following modules and activities were developed:

1. Full digitalization of process of objects questionnaire,

2. New module on registering of transaction contracts in order to enable registering of

contracts which contents more than one property or more than one buyer/seller.

3. Second version of E-Office (Property Tax online office) which enables the content

management by respective officials of PTD,

4. Involving of Google maps on all modules of information system Pro tax, in order to

facilitate the field questionnaire,

5. System module for mass assessment of lands and objects,

6. System module for mass tax of lands and objects,

7. System module for mass billing of lands and objects,

8. Adoption of information system Pro tax to implement Law No.03/l-204 Immovable

Property Tax as follows:

a. Changing of distribution method of payment through tax years,

b. Proportional distribution of payment for various tax units,

c. Changing of time limits for penalties and interests.

9. Incorporation of official addresses according to Addresses Register of Kosovo Cadastral

Agency.

10. Pastrimi i regjistrit te tatimpaguesve te regjistruar me shume se një here duke u bazuar ne

numrin personal dhe numrin e biznesit

11. Transfer of responsibility for maintenance and operation of infrastructure of servers from

IT team of project ”Pro Tax 2” to the division of infrastructure of Information Technology

Department of Ministry of Finance.

12. Regular daily maintenance of properties register and software of Information System Pro

Tax.

Minister of Finance on 29.10.2018 signed Administrative Instruction MF-No. 03/2018 on

Assessment Methodology.

Sub legal acts were drafted in regard to:

‐ Organizational structure of units for property tax administration within municipalities and

principles of tax administration;

‐ Responsibilities, procedures of functioning and the way of compensating the chairman and

members of Supervisory Council on Licensing of Assessors of Immovable Properties;

‐ Complaint procedures.

10. Central Harmonization Department (CHD)

In regard to development and advancement of sub-legal and legal framework on development

of Financial Management, Control, and Internal Audit, it is worthy to mention that Law on

PFIC was decreed by the President of Kosovo ad since May 2018 entered into force.

After entering into force CHU initiated procedures on issuing of Administrative Instruction.



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A commission was established on drafting of Administrative Instruction on definition of criteria

for establishing of internal audit units, audit committees and regulation for finance management

and control. Administrative Instructions are under finalization stage. In cooperation with USAID

a manual was prepared for auditing of public procurement. This manual will be part of Guidance

for internal audit.

In frame of professional upgrade in field of finance management and control, there was a

piloting for the Register on processes description in municipal level, piloting in Vushtrri Gjilani

municipalities, which document identifies risks for these institutions in some of the activities of

PFIC, as well as provides an analysis for the management of these risks. This document for these

institution will be used as model for PSE and other;

A model framework for monitoring of PFIC was completed, with practice examples from

monitoring of the Ministry of Finance, Commission on Mines and Minerals and Vushtrri

Municipality in cooperation with SIGMA experts.

This has been achieved through training of 198 responsible officials on Public Finance

Management on the implementation of Finance Management and Control and other activities with

specific objective on; identification, analysis and risk management.

Out of 110 PSE, to whom were distributed self-assessment questionnaires, 108 of them or 98%

have filled the questionnaires. Compared to 2016 we have an increase of 2%.

In frame of Program for certifying of internal auditors a training was organized in program for

certifying, in which were included 33 participants, out of which 27 out of public sector. 16 internal

auditors completed successfully certifying program, and they’re equipped with certificates.

In regard to Monitoring and assessment of Budgetary Organizations on the implementation

of Financial Management, Control and Internal Audit, during this reporting period were

received and analyzed 69 reports from IAU on activities conducted in field of internal audit for

2017, and 63 reports for the first semester of 2018, and monitoring was completed in ten IAU as;

Ministry of Health, Tax Administration of Kosovo, Skënderaj, Klina, Ferizaj, Pristina and Vitia

municipalities, Ministry of Labor and Social Welfare, Ministry of Trade and Industry, and

Podujeva municipality.

Annual report was prepared on Functioning of Public Finance Internal Control System for 2017.

The report was submitted to the Minister of Finance, and afterwards to Government, Assembly

of Kosovo, and national Audit Office (NAO). The report was approved by the Government and

Assembly of Kosovo.



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11. Internal Audit Department (IAD)

Until 10 December 2018 14 audits were completed and monitored, out of which 2 are pilot audits,

monitoring in support of National Program for certifying of internal auditors in public sector, and

3 audits are in process.

Processes Management Procedures of Projects of Public Private Partnership in CDPPP;

Planning and realization of Property tax Incomes in municipalities;

Energy Regulatory Office;

Civil Aviation Authority;

Anti-Corruption Agency;

Kosovo Council of Cultural Heritage;

Independent Oversight Board of Civil Service;

Ministry of Diaspora;

Panel for Complaint and Submissions;

Procurement Review Body;

IA Central harmonization Unit;

Central Procurement Agency;

Fiscal Policies and Financial Markets Department;

General Service Department.

Whereas in auditing process are 3 more audits:

Procurement Division - MF;

Budget and Finance Division - MF

Budget Department - MF

Achievements/actions:

Out of 14 completed audits, 39 recommendations were provided, which were completely

accepted and addressed for implementation.

Challenges:

Assessment of functioning of internal control system within audited entities.

12. Central Department of Public Private Partnership (CDPPP)

In frame of upgrading the capacities in field of public private partnership for central and

local level, in total were held 10 sessions by 2 days of training with public officials about PPP with

60 participants in total. Training plan for 2019 for public officials has been agreed with KIPA.



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In regard to activity for the Amendment of Law on PPP (No. 04/L-045) and secondary

legislation, until now according to procedures on drafting of new draft law on PPP, various actions

have been undertaken for the amendment of this law, new provisions were researched and

reviewed, and opportunities and new comments were elaborated in order to be included in draft

law for PPP according to professional adaptability, whereas final draft has been finalized.

Currently this procedure is in final stage, respectively it will be continued by last meeting of

working group members and incorporation of last comments from this group, in order the

procedure continues by forwarding relevant documentation related to the proposal to the relevant

bodies which have 15 working days in order to comment about proposal in accordance with RPGK

(Rules and Procedures of Government of Kosovo).

Draft Law on PPP contents: current law, comments from public consultation in stage of concept

document, comments from internal consultations of our office (CDPPP), 25 resulted options from

EU Directive 2014/23 and other respective comments, which have been realized during

consultation meetings with stakeholders about the amendment of this Law, and the need for

updating of secondary legislation was also reviewed.

CDPPP prepared and CPPP approved Terms of Reference for PMU for PIA:

This unit was established with new composition, pursuant to Decision V. No. 04-18 dated

17.05.2018.

CPPP issued in total 5 decisions:

- V. No. 01-18 on 16.04.2018 Abrogation of CPPP Decision No.04-2017 dated 17.05.2018;

- V. No. 02-18 on 16.04.2018 On implementation of project-proposal ”Underground Parking at

Philology Faculty”;

- V. No. 03-18 on 22.02.2017 on extension of inciting product for PIA ”Adem Jashari”;

- V. No. 04-18 on 17.05.2018 on Changing of decision No.16-01 dated 10.02.2016 by which the

team of monitoring of Contract PPP-PIA has new composition;

- V. No. 05-18 on 04.06.2018 on Supplement of Decision No.05-2018.

13. Legal Department (LD)

Within reporting period were tracked for approval at the Government of Republic of Kosovo 7

draft laws, which have been approved by the Government of Republic of Kosovo.

Minister of Finance in total signed 4 sub-legal acts.

Also, Minister of Finance signed 9 international agreements and a large number of opinions have

been issued for public institutions and private parties.



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14. European Integration and Policy Coordination Department

(EIPCD)

EIPCD in Annual Working Plan of Ministry of Finance for 2018 (AWPMF 2018) has three targets.

During reporting period 2018 fulfillment of three targets continued with high intensity from the

working plan for 2018, by completing of following activities;

1. Efficient coordination of European Integration process, Strategic Planning and policy

development at Ministry of Finance

- EIPCD as Secretariat of Working Group (WG) of Public Finance Management (PFM)

coordinated the activities in realization of purpose for Sector Budget Support. EIPCD in close

cooperation with all MF structures and other involved institutions undertook activities which

derives from the implementation of PFMRS and fulfilling other requests deriving from this

process. During this period contributions were provided on drafting variable indicators of PFM for

Sector Budget Support, actions for the review of Action Plan of PFMRS and addressing of the

needs for technical assistance for SBS. In this frame, CG of PFM held in total 21 working meetings,

with support of development partners, 2 Video Conferences with representatives of European

Commission, one in Pristina and other in Brussels for reporting period. During December 2018 in

Government’s meeting was approved the review of Action Plan 2019-2020 and addressing of the

review of PFMRS 2016-2020. It is worthy to mention that strategy priorities haven’t changed, but

some indicators were removed being replaced by indicators of Financial Agreement.

- During reporting period CG of PFM, led by MF held other working meetings with various topics.

Also, the requirements related to the Agreement signed by the European Commission and MEI for

Sector Budget Support (SBS) in the field of PFM have been completed. After ratification of the

Agreement on 13.11.2018, has been drafted and submitted the request for the transfer of fixed first

installment in amount of 6 million Euro. Total amount of Sector Budget Support is amounted to

21 million Euro as sectorial budget support and 4 million Euro as technical Assistance.

- Two meetings of the Public Finance Management Dialogue (PFM) were organized and held on 25 April and 27 November 2018, in which the first Annual Report 2017 was presented and at the second meeting was discussed the Action Plan for the years 2019-2020. Comments and contributions received as part of public consultations are addressed in the 2019-2020 Action Plan for the implementation of PFMRS 2016-2020.

- In reporting period, EIPCD addressed the requirements of Ministry of European Integration

(MEI) about materials/reports of Ministry of Finance about meetings of Association Stabilization

sub-committees. EIPCD in coordination with all MF structures contributed on finalizing the

contributions from MF structures which are involved in Association Stabilization sub-committees

and participated in meetings with European Commission, as in Association Stabilization sub-

committee for “Justice, Freedom and Security” and participated in the meeting with European

Commission on 6 and 7 June in Pristina.



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Conclusions have been finalized after each meeting of the Sub-committees from the scope of MF

and the monitoring of the implementation of the Conclusions of the Association Stabilization sub-

committees.

- EIPCD made the coordination of contributions with all MF structures in order to address the

demand for updating the ”Country Report” by the European Commission. Coordination of

contributions has been made with all MF structures in order to address the request for updating the

Progress Report based on the ”Challenges from the EC Report for Kosovo 2018 and the

implementation of the National Program for the Implementation of the SAA”. EIPCD in

cooperation with all MF structures has provided contributions to this report.

- EIPCD has undertaken activities to support and prepare materials for all MF structures that are

included within the Executive Commissions (EC) (EC) of European Agenda as EC; ”Economy,

Financial Control and Statistics”, ”Trade, Industry, Customs and Taxes”, ”Internal Market,

Competition and Consumer Protection”, and ”Justice, Freedom and Security”.

- EIPCD participated and provided support in Working Groups as:

WG for Concept Document on drafting of Concept Document for Public Debt. This

Concept Document has been finalized and approved in Government’s meeting.

WG for Concept Document for review of Tax Legislation. This Concept Document has

been finalized and approved in Government’s meeting on 27 April.

WG for Concept Document on Games of Chance. This Concept Document has been

finalized and approved in Government’s meeting.

WG for Amendment of Regulation on Staid Aid.

WG on drafting of Concept Document for the Volunteering Policy in Republic of Kosovo.

Coordination of WG III in drafting of Government Strategy for Cooperation with OSHC-

Workshop on 14 June 2018.

Drafting of Migration draft profile 2017, contribution in capacity of a member of

Government Body for Migration, and

The Permanent Government Group Secretariat for the Strategy for the Prevention and

Fighting of the Informal Economy, Money Laundering and Financing of Terrorism 2014-

2018 has been supported. The Secretariat has finalized even the review of the Action Plan

for 2018 and finalized the Annual Report for 2017. Also, the work on drafting the new

Strategy for 2019-2023 has started.

2. The best coordination of Foreign Assistance in frame of MF

- Under the organization of EIPCD on April 2018 was held a Meeting of Sub-sectorial Working

Group (MSWG) for coordination of Donators assistance, where the participants in meeting were

the members of Coordination Group of PFMRS, Government Institutions of Republic of Kosovo,

representatives from OPM, Independent Institutions which operate sin Kosovo as well as

representatives of Foreign Donators Community.



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- The preconditions for Sector Budget Support (SBS) in the field of Public Finance Management

have been met. PFMCG has managed to negotiate eight (8) variable indicators to benefit the Sector

Budget Support in the activity of PFM. The Financial Agreement reaches the amount of 21 million

Euros in the form of a grant and is followed by Technical Assistance in the amount of 4 million

Euros

- During June, based on the request of OECD-SIGMA individual meetings were organized with

all involved structures involved in the implementation of PFMRS on the review of Action Plan

and individual meetings with key development partners of the country. Their mission last three

days; 18,19 and 20 June 2018, where EIPCD coordinated the activities with actress directly

involved in the strategy implementation in order to address achievements/challenges, under

implementation agreeing on further actions. In the other hand, meetings with development

partners were related to the coordination of Foreign Assistance.

- During June, based on the request of Project PPF (Project Preparation Facility) individual

meetings were organized with all involved structures involved in the implementation of Public

Procurement, where Project PPF (Project Preparation Facility) hired an expert for;

1) Development of Terms of Reference for supplementary support for the Efficient and

Transparent Public Procurement in Kosovo, and

2) Development of Terms of Reference for supplementary support for Sustainable Collection of

Internal Revenues.

- During whole year was coordinated the support of Project PPF located in MEI and Project

OECD/SIGMA with expertise and workshop in PFM activity. Also it is worthy to mention the

support provided by GIZ through regional project for IPA structures.

3. Development, Monitoring and Reporting of Working Plans and Strategy Action Plans (as:

AWPMF, GAAP, NPISAA, ERP, ERA, PFMRS, Migration Profile, Government Strategy

on Cooperation with OSHC etc.).

Contributions are collected and processed in relation to the finalization of annual reports according

to the following requirements and time limits:

- European Reform Agenda (ERA). - EIPCD undertook activities for the support and

preparation of materials for all MF structures which are included in the European Reform

Agenda (ERA). These materials were prepared according to the requirements received form

General Secretary of MF, Cabinet, Ministry of European Integration and NGO/s. Documents

described the implementation of foreseen measures from all MF structures which are included

in the European Reform Agenda (ERA). Reports and analyzes were prepared, as Report on

implementation of ERA activities for period January-June, January-December 2018 for EIMC

(European Integration Ministerial Council), Report on ERA implementation by MF for portal

Lajmi.net, etc. It is worth mentioning that all ERA actions from MF competency have been

completed in time.

- National Program on Implementation of SAA (NPISAA) 2018. – During reporting period,

EIPCD coordinated activities with all MF structures and other institutions with purpose of



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drafting quarter reports of National Plan on Implementation of SAA, on foreseen measures

from MF field of activity. EIPCD prepared all quarter reports for 2018 on implementation of

NPISAA on time.

- Government Annual Working Plan (GAWP) 2018. – EIPCD coordinated activities with all

MF structures, prepared and finalized on time and quality all contributions from MF structures

that are included in quarter reports on the implementation of Government Annual Working

Plan (GAWP2018).

- Ministry of Finance Annual Working Plan (MFAWP) 2018. - With request from OPM,

after collecting of contributions, in June we’ve prepared draft report of achievements

September 2017 – June 2018. EIPCD, in cooperation with all MF structures completed drafting

of regular quarter reports on the implementation of Ministry of Finance Annual Working Plan

MFAWP 2018, form of reporting Narrative and Tabular.

- Public Finance Management reform Strategy (PFMRS) 2016-2020. - Coordination

Group of PFM supported by EIPCD as secretariat, during reporting period was engaged in

collecting of contributions about Annual Report 2017 and Semester Report 2018 on

implementation of PFMRS. The Reports were finalized by Secretariat of Coordination Group

of PFM according to plan in Q2 and Q4 2018. Report 2017 was presented in meeting of

PARMC (Public Administration Reform Ministerial Council) on 19 April 2018. Annual report

2017 was also discussed dialogue meeting for PFM held on 25 April 2018, where the

conclusions from it were presented in the meeting of Special Group on PAR held on 26 April

2018. The report addressed even current suggestions of SIGMA and recommendations of

European Commission from the data of Annual Report 2016. The report was published at MF

website into three languages.

- Visa Liberalization – It is worth mentioning that in June we have prepared MF contribution

for Summary Report for the implementation of criteria from the roadmap on visa liberalization

-

15. IT Systems Management Department (ITMD)

During period January – December 2018 in ITMD were performed all activities which derives

from the action plan in regard to the maintenance and operation of, providing of support and

assistance, completion of advancement of IT infrastructure (network and servers), signing of

contract for the project of Integration of Systems and Data warehouse, and it is in the

implementation process of this important project.

Some of the activities of this Department during this period are;

Division of IT Infrastructure conducted following activities:

Management of Data Center respecting Internal Administrative Instruction MF-No.01/2014 on

Rules and Procedures on Permitting of Access at Data center of Ministry of Finance. Also it

was fully implemented maintenance plan of Data Center, and monthly maintenance were

conducted.

Administration and maintenance of IT systems and services (Servers Infrastructure and

Storage, Virtual Infrastructure, vCenter, vSphere ESXi, Domain, Acive Directory, DNS,



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DHCP, File and Print Server, Sophos Antivirus, Project Server, Sophos Web Appliance, Portal

of Intranet , BDMS, PIP, ProTax System, Backups).

Administration, maintenance and securing of network and access to Internet. Publishing of e-

services in Internet. Enabling the access of MF from other Institutions of Republic of Kosovo

including even Kosovo municipalities.

Administration and maintenance of wireless network.

Maintenance and access on all systems published by ISA (Regularity system, e-archive, e-

property, etc).

Administration and maintenance of IP Telephony system.

Updating of network infrastructure respectively updating of equipment switch and firewall.

Updating of virtual infrastructure and migration of servers into new hardware infrastructure,

Updating of operation systems and of some applications of Property Tax Systems,

Displacement of servers and old storage to Data Center of MPA/ISA

Configuration of old equipment for the recovery in case of disaster.

Division of IT Operations conducted following activities;

Installment, configuration and maintenance of computers, lap tops and printers (Formatting,

installment of applications, updating of operations system and applications, preparation to

insert in domain, inserting in domain),

Training of municipal officials in using of property tax system,

Registering of payments in Property Tax System,

Backup and preserving of information of Property Tax System into safe locations,

Activities of division of IT Applications:

All activities which are related to functioning of software systems of MF were conducted, as; PIP;

BDMS; Property Tax System. Daily and Periodic reserve copy of all systems was completed.

Analysis of needs for the project of Systems Integration and Data Warehouse was also completed.

Projects in continuity:

- Continuation of implementation of Systems Integration and Data Warehouse,

- Continuation of implementation of changes into Property Tax System – Pro Tax - E-

Office,

- Configuration of systems in order to provide service ProTax e-Office

- Planning and implementation of system for CHU.

16. General Service Department (GSD)

In general we’ve realized targets and foreseen actions with annual working plan. Following actions

are presented according to targets;

I. Human Resources Division:

Change and monthly adjournment of payrolls;



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Continuous management of information for human resources;

Establishing and adjournment of personnel files;

Preparation and issuing of 181 (one hundred and eighty one) administrative acts about human

resources;

Six processes were conducted according to the Specific Service Agreements, and resulted with

9 engaged official;

Preparation and delivery for publishing of internal (advancement) and external competitions

and re-advertisement, and management of this recruiting processes (eight internal competitions

were launched – advancements, as well as eighteen external competitions – public, and one re-

advertisement. During this period, we have 13 new employments and 9 advancements. There

were 6 moves of the staff within the Ministry, one transfer from outside to the Ministry, and

one transfer from the Ministry to other institution. All requests for the authorization of

competitions (internal and external), were realized through system and procedure HRMIS;

During this period 8 officials terminated contract of employment, two of them were retired;

Meeting all obligations on Selection Commissions, Disciplinary Commission, and Complaints

Commission;

Administration of System for Management of Regularity at Work;

Administration of needs assessment for training, monitoring and reporting, ( mainly staff

training were performed in IKAP, CEF of Slovenia, and in JIV), which results with over 70

officials as participants in various trainings;

Challenge; Non full functionalization of Human resources Management Information System.

Human Rights

In continuity was promoted and monitored respecting of legislation in field of human rights and

communities in Ministry, and all obligations which resulted from respective legislation were met,

good international practices and policies into force. Gender equality was completely implemented,

and rights of communities. Representation, cooperation and contribution of officials in working

groups, workshops, and various participations of relevant field of activity was good, showing high

performance. Ministry of Finance had no recommendation from the Commissioner on Languages,

and nor from the Ombudsperson.

II. Logistic services were realized based on working plan, mainly through following services:

Establishing working conditions for the MF staff, within placed premises, as in Government

building and rented premises, according to opportunities including even maintenance and their

security. During the year another private premise was rented with 510 square meters, in which

premise were placed two departments;

Administration of vehicles was in compliance with legislation into force. During whole year

efficient and effective services were provided, according to the officials’ requirements and on

time. Maintenance and servicing were regular. During the year, for providing of transport

services, MF rented, according to the contract with CPA (Central Procurement Agency), six

vehicles, whereas it has been released from 12 official vehicles which were delivered by MPA

for sale (according to Government’s decision);

Providing of interpretation/translation services in English language 3,255 pages and 198 hours

of simultaneous interpretation, whereas in Serbian language were translated 5,166 pages, and



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56 hours of simultaneous interpretation, whereas were lectured 625 pages.

Interpretations/Translations through economic operator were performed according to the

requirements and in accordance with Contract;

Documents Administration Unit took care to realize works in the office in compliance with

legislation. Through DAU we’ve received in total 3,393 submissions and official documents

whereas in total were realized 3,454 exiting submissions and other official documents.

Receiving and distribution of official documents was performed within legal time limits, and

whole material which circulated was registered even in electronic form;

During this period were checked in total 1,130 bills.

Challenge

It is a concern, that during whole the year, despite efforts, requests and our remarks, we didn’t

receive the services from economic operator selected by MPA, as in cleaning and maintenance,

interventions in acclimatization, repair of windows, curtains and other services according to

requirements!

Activities form Director’s Office

Activities on managing the Department, about realization of Department’s targets and

management;

Contribution and participation in working group for the package of laws for the Public

Administration Reform (Draft Law on Wages, DL on Organization and functioning of State

Administration and DL on Public Officials), and the contribution for Working Group –

Secretariat for Rationalization of Agencies (Action Plan);

Participation and contribution on Joint Commission for Allowances MPA-MF;

Contribution in Commissions – working groups as: Concept document on Inspections (MTI),

Working Group for State Reserves, Analysis of Interpretation/Translation Unit, and Concept

Document for translations (OPM);

Engagements in MF internal groups, especially review of Action Plan for the implementation

of Public Finance Management Strategy;

Administration of internship with students from UP “Hasan Prishtina” and Private Colleges,

in total 78 students benefited from internship in MF and its subordinating agencies, in period

August-October 2018;

Acting Manager of Financial Reporting Division;

Work in nine selection Commissions within MF;

17. State Aid Department (SAD)

SAD in the beginning of April finalized recruitment process with 5 senior officials for SAD , out

of them two senior officials in the Division for the Oversight of Control of State Aid and three (3)

senior officials for the Division of Assessment of State Aid. Currently the department counts in

total seven (7) officials.



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Regarding legal framework, in cooperation with TAIX experts we’ve drafted Regulation on

Notification Procedures pursuant to new Law on State Aid, and Draft Regulation for the Work of

State Aid Commission.

Regulation on Notification Procedures was approved, whereas Regulation for the Work of State

Aid Commission is expected to be approved upon the appointment of State Aid Commission. In

regard to secondary legislation, there was approximation with EU directives.

In regard to trainings, SAD staff until now benefited from two projects:

1. Project of Embassy of United Kingdom – one expert started to train SAD staff and potential

donators of state aid about establishment of an inventory for state aid, and

2. EU expert – one expert in support of SAD on the establishment of legal framework.

Both these projects will continue until April 2019.

From the Project of Embassy of United Kingdom, during December SAD initiated the organization

of information roundtables for donator institutions;

1. Ministries,

2. Agencies,

3. Regulators,

4. Municipalities

Offices and other institutions which have been identified as donators of state aid.

Also, SAD started informing process about the implementation of rules of state aid.

TAIX expert held a training with SAD staff during June, where it was reviewed the Regulation for

the work of State Aid Commission.

SAD has a cooperation with all international institutions as:

Energy Community Secretariat in Vienna,

Liaison Office of European Union in Pristina,

Competiveness General Directorate, respectively sector of State Aid in Brussels,

State Aid department in Macedonia,

State Aid sector in Albania,

Embassies in the country and other institutions which have relations with State Aid.

18. Division for Public Communication (DPC)

From the Office of Public Communication during 2018 were drafted and published 106 Press

releases.

26 meetings were organized and held, where some of them meetings with media for signature of

various agreements, meetings with businesses, Conference on Semester Report for revenues and

expenditure, as well as the event for launching of Transparency portal.



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Interviews were organized for Minister Bedri Hamza in TV/s and other visual media as: RTK,

KTV, KLAN KOSOVA, and TV21, Radio Evropa e Lirë, TV Dukagjini, Kosova Press, T7,

Telegrafi, and Infokusi.

Also, interviews were organized even for Deputy Minister Fatmir Gashi and Advisor Lulzim

Rafuna, Director of PTD Shkelzen Morina and Director of PPP Ilir Rama.

OPC during this year received 526 questions, and out of this 526 questions, we’ve replied to 507,

and other 19 questions were addressed top other responsible institutions in order to receive

answers. Answers were given to journalists of daily newspapers as: Koha Ditore, Kosova Sot, Zëri,

Bota Sot, Epoka e Re, portals Ora Info, Epoka e Re, Kosova Press, Ekonomia Online, Tribuna

Chanel, Zëri, Telegrafi, Ndërtimi Info, Arbresh.TV, Gazeta Express, Infokusi, Lajmi.net etc.

Also, OPC received requests for access on public documents, and all applicants for access on

public documents were granted required access, and parties received back the answer within time

limit stipulated by law.

IN Ministry’s website were published all materials which were forwarded by respective

departments of MF. Materials were published in two official languages.

During 2018, OPC received requests to lecture official documents, reports, press releases, etc. in

number of 625 pages which were lectured and corrected within imposed time limit.

We had 16 requests from students to provide them financial support on diploma thesis and

additional advices.

OPC photographed all activities of Ministry of Finance.

Also a Report for IKP of REFOND of TAK was designed.

MF website was also redesigned.

OPC publicly launched Transparency Portal on 4th December of this year, achievement highly

appreciated by Minister Hamza, and German Ambassador in Kosovo Mr. Christian Heldt and GIZ

representatives.

19. Procurement Division (PC)

During annual reporting period, according to requests and approvals from CAO (Chief

Administrative Officer) were conducted 54 (fifty four) procurement activities for supply services

and repairs according to requests form MF Departments, Treasury, FIU, and CPA.

Out of signed contracts, 31 were completed, are under implementation was long-term contracts.

Nine requests were presented for review from EO about procurement activities in MF. In nine

cases requests were refused by Procurement Division as ungrounded, and eight of them weren’t

Out of 54 (fifty four) conducted activities, 47 contacts were signed, 1 activity was cancelled, and

6 are in tendering and assessment process.



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contested afterwards in by PRB. One of EO afterwards filed a complaint at PRB and by Decision,

PRB refused the complaint of EO as ungrounded.

359 purchase orders were processed in purchase module of KFMIS through which were completed

payment obligations to MF contractors.

20. Financial Reporting Division (FRD)

FRD, fulfilled its professional and supporting role for Kosovo Council for Financial Reporting

within capacities and in compliance with legislation.

In March of this year was approved new Law on Accounting, Reporting and Auditing, which starts

to be implemented in the beginning of 2019, whereas 2018 was a year in which was foreseen

approval of sublegal acts for implementation.

In June 2018, the re-appointment of KCFR members was reorganized, which, after

functionalization, together with the Financial Reporting Division, intensified their activities in the

preparation of sub-legal acts and work regulations in accordance with the new law, but also

performing other duties according to law.

KCFR has drafted and approved draft Administrative Instruction on the structure and content of

annual financial reporting, which is under further legal proceedings at the MF Legal Department.

The KCFR Rules of Procedure have been drafted and approved. Other administrative acts, foreseen

by the new law, are in the final stage of finalization and are expected to pass all procedures and be

approved by the end of the year.

KCFR has received 360 financial statements, of which 15 consolidated and audited by economic

entities, which are obliged to submit. From these submitted statements, the Annual Report of the

Financial Statements was prepared and published on the website of the Ministry of Finance. During

this year KCFR has approved these recommendations of the licensing commission; 35 (thirty-five)

local statutory auditors - extension of license, 13 foreign statutory auditors – extension of license,

13 local law firms – extension, 8 foreign law firms – extension of license.

The KCFR challenge remains the financing of the Public Oversight Board, which will be

established under the new Law on Accounting, Financial Reporting and Auditing, which will enter

into force on 1 January 2019, as well as equipment with a software for electronic registration

financial statements audited and submitted to the KCFR. Also the appointment of the Head of

Division and the lack of substitution of an official (maternity leave) were assessed as challenges

and obstacles to full realization of objectives!



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21. Budget and Finance Division (BFD)

During January-December 2018, BFD proceeded with preparation of plan of cash flow, for fiscal

year 2018, according to the Regulation No.03/2014 on Funds Allocation, and fulfilled the

templates of authorizations for the beginning of fiscal year 2018.

BFD, on 14.01.2017 received a submission form CHU. Central Administration of Ministry of

Finance prepared the questionnaire of self-assessment on financial management and control

regarding the quality of financial management system and financial control system for the

reporting year January-December 2016.

Controlling list for self-assessment according to Financial Management and Control, Central

Administration of Ministry of Finance prepared PDF templates according to CHU request. .

During reporting period all payments were processed according to Financial Rules which are into

force as well as opening and closing of advance payments of official travels.

The costing from Budget and Finance Division for AI, Regulations and Draft laws, which have

been processed for costing from Legal Department from 01.01.2018- 12.12.2018:

1. Administrative Instruction for implementation of central procedure of public procurement,

2. Loan Agreement between Republic of Kosovo and European Investment Bank for project

Pristina-Peja,

3. Segment Kijevë Zahaq, Ratification of Loan Agreement between Government of Kosovo

and EBRD,

4. Concept Document for amendment of fiscal and agriculture policies for the production of

tobacco and cigarettes in Kosovo,

5. Loan Agreement between Republic of Kosovo Unicredit Bank Austria AG,

6. Draft Law for Ratification of Finance Agreement between Republic of Kosovo and

International Development Association for the project of Kosovo digital economy,

7. Draft Law on ratification of Agreement between Republic of Kosovo and Government of

Swiss regarding support program for water supply and sewerage in rural zones – STAGE

8. Draft Law on Value Added Tax,

9. Draft Law on Personal Income Tax,

10. Draft Law on Corporate Income Tax,

11. Procedure and Notification Form for State Aid,

12. Draft Administrative Instruction for the National Risk Assessment for Money Laundering

and Financing of Terrorism,

13. Concept Document on Games of Chance,

14. Loan Agreement between Republic of Kosovo and RAIFFEISEN BANK

INTERNATIONAL AG,

15. Loan Agreement between Republic of Kosovo and Unicredit Bank Austria AG,





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18. Draft Regulation for the Establishment and Implementation of Function of PSEIA,

19. Regulation for use of Credit Card for official travels, and

20. Draft Administrative Instruction on Assessment Methodology.

Ministry of Finance equalized revenues and expenditure with Treasury and correction the value of

Government assets under management of Budget Organization.

Ministry of Finance prepared financial statements for fiscal year 2017, in harmony with accounting

standards for public institutions, prepared according to Financial Regulation No.06/2011.

Pursuant to Law No. 06/L-020 for Budget of Republic of Kosovo for 2018, Article 17 items 2 and

3, Ministry of Finance prepared physical and financial progress report on all capital projects.