Citizens rush to pay car taxes after cut enters into force

TIRANA, May 21 – After a freeze in the past two months following a government decision to cut annual car taxes, its entry into force has brought a rush of car owners rushing to regional directorates of road transport to benefit from halved taxes as an initiative taken ahead of the elections. Under the new decision, citizens who pay taxes within June 30 will face no late payment penalties. The changes also allow car owners who have not paid taxes in 2011 and 2012 to pay only half of them.
The changes to the national taxes were approved ahead of the elections as a concern raised by citizens who possessed old cars over the high tax burden.
The decision foresees the fixed rate for diesel will be cut to 12.5 lek, down 25 lek currently while the petrol rate will be halved to 10 lek down from 20 lek. Currently, a six-year-old diesel car with 1,600 cc engine pays 8,000 lek in annual taxes but will pay 4,000 lek after the new changes enter into force. The new changes affect the state budget with 2.5 billion lek (Euro 17.5 million) and are expected to enter into force next June.
In late Sept. 2011, a new law unblocked the sales of second-hand cars whose transactions had dropped by 25 percent during the first eight months of 2011.
The removal of customs duties was accompanied with a new taxation system based on cars’ age, the engine capacity and the kind of fuel they use.
While the new law lifting customs duties cut second-hand car prices by at least 30 percent, Albanians increased purchases for cars produced in the past 5 to 10 years, also because of the new tax system considerably increasing annual fees for older motor vehicles.
Some 26,113 cars, worth 5.5 billion lek, were imported in the final quarter of 2012, taking the total number of imported cars during the whole of 2012 to 56,499 cars, up 8.8 percent compared to 2011, according to INSTAT data.