Albania is exploring the use of artificial intelligence (AI) to address informality in its social security system, a move experts believe could increase compliance and boost contributions.
The country’s “pay-as-you-go” pension system currently relies on balancing contributions with the number of pensioners. However, this model has faced difficulties in maintaining that balance.
Nadia Elbasani, a cybersecurity expert, explained that AI could integrate data from businesses, employees, and state institutions to detect discrepancies quickly. When inconsistencies arise, AI can flag them for further scrutiny, alerting tax authorities to potential underreporting.
“AI offers a way to create a more transparent, efficient system,” Elbasani said, noting that countries like Italy and France have already used similar technologies to improve their social security systems.
The adoption of AI presents a new opportunity for Albania, where trust in administrative tax controls has been eroded over time. Experts hope the technology will bring more businesses into the formal economy, increasing contributions to the social security fund.
