Govt to review law on used car sales

TIRANA, Feb. 8 – Following the decrease in the used car sales after the entry into force of a new law increasing taxes in mid-2010 and the use of illegal practices, government is working to review the taxes. The situation was admitted even by Prime Minister Sali Berisha this week during a meeting of the ruling Democratic Party parliamentary group on Monday, when he asked the finance ministry to set up a working group reviewing the tax.
The sale of cars under legal contracts has been in decline and car owners are using authorization or donation practices to sell their cars following the increase in taxes.
Finance Ministry data show the road circulation tax during the first 11 months of 2010 dropped by 1.9 percent compared to 2009 while tax on sale of used cars fell by 7.2 percent.
Used car prices registered an increase of 5 to 20 percent following the entry into force of a new tax imposed on their resale within the country in mid-2010.
The tax is based on the car’s engine’s horsepower, years of usage from the moment the customs duty has been paid, and the kind of fuel it uses.
The new tax will be calculated by multiplying the car’s cylinder, with a fixed coefficient of 0.5 for each year of use and a fixed tariff of 25 Lek for diesel and 20 lek for petrol.
In this way, the owner of a car with an engine of 2000 cc imported in 1998 will have to pay a customs duty of 300,000 lek (3,000 USD) if selling the car, but only 50,000 lek (500 USD) if the car has had its customs import tax paid in 2008.
The changes to the national tax system are aimed at discouraging use of old cars in Albania and meet the Stabilization and Association Agreement (SAA) commitment of removing fixed-rate taxes for imported used cars from EU member countries.