KOSOVO: Highlights of IT Audit for the Property Tax System (PTS)

Property tax in Kosovo* is an important source of revenue for municipalities and helps finance local public services such as street lighting, road maintenance, cleaning, and infrastructure investments. The Ministry of Finance, through the Department for Property Tax, has a leading and supervisory role in administering the property tax system at the national level.

This tax applies to all immovable properties, including buildings and land, regardless of their use. The PTS, by 2025, has recorded over 607 million euros, 817,040 buildings, and 2,258,838 parcels. The system also enables electronic payments, making the process easier, more transparent, and more efficient.

We conducted the audit to assess whether the parties responsible for managing the PTS ensure that the system provides quality, accurate, complete, and reliable data.

Figure 1. Property Tax System (PTS)

Reviewing problem indicators, our evaluations based on the Active IT Audit Manual for identifying high-risk areas the PTS has deficiencies in development and application controls.

The issues arising from the audit are also related to the area covered as follows.

Figure 2. Structure of audit issues/findings for Property Tax System (PTS)

The Ministry of Finance, Labour and Transfers is not able to ensure that the developments made in the Property Tax System achieve their intended purpose. There is a lack of procedures that provide functional internal controls, inefficient resource management, overlapping and avoidance of responsibilities, while developers end up evaluating their own work.

The lack of input controls in the PTS application has created risks to data accuracy and service integrity. There are deficiencies in the system’s integration with the Kosovo Cadastral Agency’s data registry, as well as with the Survey System, and compensating controls at the municipal level are missing. This has resulted in inaccurate data on taxpayers and properties.

Weaknesses in processing controls have caused improper allocation of payments and incorrect debt balances for citizens, leading to unjust penalties and interest charges.

The PTS lacks controls that ensure completeness and accuracy of results and payment records. The exact date of payment is not recorded, and the actual and timely status of invoices is not reflected. As a result, citizens may be unfairly penalized with interest despite having paid on time.

Weaknesses in system security controls increase the vulnerability of the PTS to information security misuse. Although the system generates audit logs, the lack of regular monitoring increases the risk of unauthorized changes or errors.

Conclusion

The PTS does not fully ensure the provision of high-quality, accurate, complete, and reliable data. Weaknesses in the system’s development and operation, the lack of standardized procedures for testing and approvals, as well as insufficient controls, have negatively affected data integrity and the efficient management of property tax. This has increased the risk of calculation errors, incorrect allocation of payments, and difficulties in accurately identifying taxpayers. We have issued 14 recommendations, of which 13 are for the Ministry of Finance, Labour and Transfers, and 1 is for the Municipalities.

* This designation is without prejudice to positions on status and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo declaration of independence.