Businesses report delays in VAT refunds

TIRANA, May 21 – Almost all export businesses report delays in value added tax (VAT) refunds, a survey carried out by the Albanian Center for International Trade has shown.
The USAID-funded study showed 99.8 percent of the surveyed businesses reported delays or non-reimbursement of VAT, worth more than 1.3 billion lek (13 million dollars) a year.
The survey was based on answers from 250 exporting companies representing different sectors and regions of the country, analyzing the impact of VAT refund delays in liquidity, sales, employment, investments and other indicators.
Some 89 percent of interviewed companies claimed VAT refunds of more than 800,000 lek. The study shows that only 16 percent of companies said they were refunded within the legal deadline of 30 days.
VAT is especially problematic for small and medium-sized enterprises. Some 73 percent of companies said they have not benefited from last year’s change to the law when businesses were granted the right not to pay tax duties at the amount of non-reimbursed VAT.
Meanwhile, officials of the general tax directorate said VAT reimbursement in 2009 was 2.1 billion lek (21 million dollars) more than in 2008.
Albanian exports are exempted from VAT (VAT rate 0%).
Exporters’ VAT refund is done based on risk analysis. Exporters classified with minimal risk are given precedence in VAT reimbursement. This category includes companies which produce 100% for exporting, have practiced export activities for over 3 years, and have been audited at least once in the last 2 years.