TIRANA, June.4 – The government’s decision to increase the excise tax on wine has alarmed industrialists who are protesting that such a decision may severely harm the domestic wine industry. The national business association, Konfindustria, claims that such a measure will force Albania’s alcohol industry to face two unattractive alternatives: bankruptcy or 100 percent informality.
The government has included in its new fiscal package a tax increase of 30 lek/liter for wine, which translates to a 150 percent increase, compared to previous obligations. In the meantime, tax for stronger spirits has increased by 50 lek/liter.
Konfindustria Mnaager, Gjergj Buxhuku, said that currently the wine market and alcohol producers has participated in informality levels as high as 80 percent, and the risk that this industry will pass 100 percent informal is very high. Considering the administration’s priority to fight informality, the decision to increase this tax is highly controversial and seen by some as self-defeating. He also mentioned that, in particular, the decision harms Albanian farmers who produce raw materials that these industries must purchase. If the wine industry is radically harmed by this tax, the loss to the Albanian economy and the state budget could reach 10 million euros annually.
Konfindustria’s statement clarifies that, “while the EU policies tend to support these industries with zero taxes and considerable subsidies given by the state, the Albanian government is doing the opposite by destroying the chances of development for one of the most important Albanian producing sectors.”
Konfindustria has offered technical assistance to the government to reconsider this decision as well as presented a request to Prime Minister Berisha himself.
New figures
The tax increase, according to the government’s latest decision, equals 150 percent for wine and 33 percent for beer. The beer excise tax will increase to 40 lek/liter from its previous 30 lek/liter. Taxes on alcoholic beverages with 12 percent or more alcohol increases to 40 leks and those beverages whose alcohol content is less than 12 percent will increase to 20 lek. The malt beer tax will also increase by 10 lek.
