Tirana Times
TIRANA, April 10 – Albanian contractors have threatened they will suspend work for one month if the government does not take immediate measures to review the tax legislation and create a favorable business environment. In an open letter to Prime Minister Sali Berisha, Tirana Mayor Edi Rama and the European Commission Delegation to Albania, the Association of Contractors warns the construction sector in Albania is in crisis because of decreasing sales, lack of permits, borrowing difficulties and non-payment for finished public works which have led to one-third of companies suspending work.
The Association strongly opposes an ordinance by the Finance Ministry to impose value added tax on a list of reference prices to calculate the construction cost. Describing the ordinance as unacceptable for a free market economy, contractors demanded the revocation of the decision leaving it only orienting and not compulsory.
“Such a thing is only possible in planned economies in which prices are fixed, controlled and unchangeable,” said the Association.
The Association is also concerned over the reference wages and profit tax construction companies have to pay for the construction spaces benefited by land owners.
The Association has also requested a normal functioning of the Tirana and National Territory Adjustment Council to unblock the construction permit situation.
Contractors also oppose another government decision which bans them from participating in tenders unless they have completed 70 percent of the work in a previously contracted project.
The construction sector is one of the most dynamic in the country, contributing to more than 10 percent of the GDP in the past years and employing 18 percent of people working in the private sector. Data published by the Institute of Statistics on Monday showed the construction sector was the hardest hit in the last quarter of 2009, recording a 14.4 per cent drop compared with same period of 2008 and an 11.8 per cent decrease from the third quarter of 2009.
