A decision to remove the Value Added Tax from private and public education expenses means that students will have to pay 20 percent less, since most private universities and schools directly carry the VAT costs to the students.
TIRANA, Jan. 20 – Essentially lowering the cost of private education in Albania by 20 percent, the country’s parliament has approved in principle a law that stops applying the Value Added Tax to all private and public schools at the start of the next academic year on Oct. 1.
The decision follows an electoral campaign promise by the ruling Democratic Party, and aims to give the small but growing market private education in Albania more room to develop. It also helps lower the cost of education in general for those students that pay out of their own pockets.
Removing the VAT means that students will have to pay 20 percent less in tuition and fees, since most private universities directly carry the VAT costs to the students.
“It is a very welcomed news for the country’s education industry, but of course its final recipients too, who will be thousands of citizens and students that continue their academic life next year,” said Selami Xhepa, a Democratic lawmaker and a supporter of the bill.
Luljeta Minxhozi, the dean at the European University of Tirana, told Albanian television that the measure will give its effects in the payment of books and courses, which are expected to become cheaper.
But it wasn’t an easy decision for the government to take. When the prime minister told a government meeting last year of his intention to get rid of the VAT in education, Finance Minister Ridvan Bode is quoted to have said, “This is no time for gifts.”
Mr. Bode is worried about the growing state deficit, and the VAT is a major source of income for the government.
But his objections were overruled as the Parliamentary Commission of Economy unanimously approved a bill that removes the VAT from public and private education. Final approval in parliament is almost a formality at this point.
“An important part of the bill that we just passed is the exclusion of education services from the VAT, be they public or private,” said Florion Mima, a DP lawmaker and an expert on taxation issues. “It was part of our electoral program, and now it is a reality.”
