Transfer to the government by the Privatization Agency of Kosovo (PAK) of a minimum of €5 million in tax obligations and a minimum of €30 million in privatization funds to government as described in paragraph 7 of this MEFP.
At R1, this prior action was only partially met. In December, parliament appointed a board for PAK, which subsequently approved the transfer of €61 million in privatization funds to the government, more than double the amount required under the prior action. However, PAK now argues that it cannot transfer €5 million (0.1 percent of GDP) related to tax debts of companies in its portfolio.
Staff still supported completion of R1 despite partially implementation of this prior action in view (i) of the authorities' demonstrated efforts to: to implement the prior
action; (ii) program implementation has been strong and the end-December 2015 QPC appear to have been comfortably met (based on preliminary data) without the €5 million; and (iii) PAK has transferred almost double the amounts required under the prior action, albeit under a different composition.