TIRANA, Nov. 16 – Facing poor performance in revenue collection, the Finance Ministry has made some other changes to the import of cars raising customs reference prices by 10 percent starting from mid-November 2011. In a new ordinance published on the Official Gazette this week, the Finance Ministry has increased reference prices for imported cars to 80 percent of the value found in the official publication known as Quattroroute, up from 70 percent to date. The reference prices are used to impose the 20 percent value added tax after the removal of customs tariffs last September.
The increase in customs references comes at a time when Albania has seen a boom in imports of cars with an average of 100 cars a day entering Albania since last August.
Starting from Sept. 2011, a new road circulation tax applying a fixed 5 lek fee on fuels is being applied as part of a new fiscal package lifting customs duties are being applied for imported cars whose owners will only have to pay the 20 percent value added tax.
Latest Finance Ministry data show transaction of used cars dropped by 25 percent to 1.25 billion lek during the first eight months of this year.
VAT changes
After introducing the 10 percent VAT on medicines in early 2011, the Finance Ministry has approved some other changes to health services foreseeing 10 percent VAT for medical services offered by public and private healthcare facilities. The law also foresees 10 percent VAT on dentist services and prosthesis, as well as medical check-ups.
Meanwhile, a 20 percent VAT is also introduced on vet services, beauty centers and traditional medicine practices.
In early 2011, the government approved a decision removing the value added threshold for private legal and health workers making them all subject to the 20 percent VAT for the services they offer.
The new changes will oblige all lawyers, notaries, specialized doctors, dentists, pharmacists, nurses, vets, architects, medical laboratory workers, accountants, and economic activity in hotels to all pay VAT despite the amount of their annual turnover.
Last year, the government introduced for the first time VAT for fees charged for services offered by lawyers, doctors, engineers and economists. The minimum threshold of VAT registration for taxpayers offering these services was put at 2 million lek (20,000 dollars) of annual turnover. Representatives of these professions opposed the changes, saying that they would directly affect customers who are expected to pay 20 percent more for legal, medicine and economy services.
