TIRANA, Jan. 28 – The American Chamber of Commerce in Albania, representing the major community of foreign and domestic businesses, has called on government to suspend the new changes to the VAT law until the Finance Ministry issues the ordinances on its implementation and consults them with the business community.
In a statement expressing its concern over the delays, the Amcham says that a time when the new VAT law has already entered into force on Jan. 1 2015, the Finance Ministry has not approved yet the ordinances which would make possible the clear implementation of the law and the clarification of many schemes and procedures.
The new VAT law obliges the Finance Ministry to adopt the necessary ordinances not later than four months after the publication of the law on the Official Gazette and consult them with the business community 60 days before they become effective. The law was published on August 13 and as a result the by-laws must have been approved and published no later than Dec. 13 2014 so that they entered into force in Jan. 2015.
“The Finance ministry has not approved the ordinance on VAT leaving a legal void but at the same time creating confusion among businesses which are not familiar with the new VAT law,” says the Chamber appealing that the law is suspended until next July so that the Finance Ministry issues the ordinances and consults them with the business community.
Back in 2014, government finalized a draft law on the value added tax, the most important tax to the state budget accounting for around 35 percent of total revenue and levied at a fixed 20 percent rate on almost every product and service, which was expected to be applied starting 2015.
The most important changes to the law include the insurance sector where the 20 percent VAT has been lifted, a measure which is expected to reduce costs in the auto insurance dominated sector. The introduction of a 20 percent VAT on media advertisements sparked fierce reaction among media owners.
Finance Minister Shkelqim Cani said the new law which was drafted under EU assistance would eliminate double taxation on VAT between businesses in Albania and EU countries.
“The new law targets offering an appropriate and attractive environment, legal and fiscal security for Albanian and foreign investors with clearly defined rules, unifying Albania’s taxation system to the EU and offering free and fair competition,” he said.
Changes to the law also lift current exclusions of VAT on imports of iron and cement for the construction of hydropower plants and the supply of services in hydrocarbon exploration and development. The 10 percent VAT on medicines and health services has already been lifted since April 2014.
