The changes are expected to be discussed in Parliament and approved by next December before entering into force starting from January 2013
TIRANA, Nov. 21 – Government approved this week a fiscal package which reduces taxes for coffee importers, levies a 30 percent tax on timber exports, increases fines to informal businesses, and makes procedures on small purchases completely digital. Speaking at a government meeting on Wednesday, Prime Minister Sali Berisha said the measures were aimed at further improving the climate of doing business, ease the fiscal burden and increase transparency.
Under the changes, the excise tax on unroasted coffee, currently at 30 lek/kg will be lifted, the excise tax on roasted coffee, currently at 140 lek/kg will drop to 60 lek/kg while the customs tariffs on coffee currently at 10 percent will also be lifted. “Under this decision, the excise rate on coffee in Albania is approximated to regional countries. The coffee business benefits 300 million lek from this reduction. I hope this is also reflected on prices although I am doubtful it will be reflected. The measures promote the domestic coffee roasting and processing, urging more employment and lowering costs,” said Berisha. Finance Ministry data show some 4,845 tonnes of coffee were imported during the first eight months of this year, up 14 percent compared to the same period last year. Albania is known for its massive coffee culture with coffee bars being one of the most widespread businesses.
The new fiscal package also foresees an increase by five times on fines to businesses which don’t pay insurance to their workers or in cases of taxpayers not declaring themselves as VAT and profit tax subjects. The fines are expected to increase to 500,000 lek.
Timber exports will also for the first time be imposed a 30 percent tariff on environmental grounds, considering the massive wood cutting phenomenon.
Starting from Jan. 1 next year, procurements on small purchases will also turn into 100 percent electronic. Since January 1, 2009, all public institutions have been issuing procurements only through e-procurement systems, thus eliminating the use of paper-based procurement procedures, and abuses, making Albania the first country in the world to implement a 100% electronic procurement system for all public sector procurements above the threshold of 3,000 Euro.
The new fiscal package also foresees that income from compensation received under final court decisions, and income from state institutions on achievements in science, sports or culture are excluded from the income tax. Gross revenue for self-employed people from commercial activity will be calculated at 20 percent of annual gross income when making the annual declaration of income. Government also decided that the registration and deregistration of taxpayer representatives will be carried out at the regional tax directorate and not the National Registration Centre where it is currently done.
Government has also decided that the award of scholarships by private universities will be recognized as deductable expenses only if a list is initially submitting to the Education Ministry at the beginning of the academic year on the number and amount of scholarships in order to avoid abuses.
Government has earlier decided to lift VAT on imports of machinery and equipment as well as cement and steel for the construction of hydropower plants.
The Finance Ministry proposes that the 20 percent VAT on imported machinery and equipment will be lifted only for investments of Lek 50 mln (Euro 351,000) or more. However, the garment and footwear industry, the country’s top exporter which this year has been suffering crisis impacts from lower demand by crisis hit EU partners Italy and Greece, will have VAT on machinery imports removed for all kinds of purchases.
The changes are expected to be discussed in Parliament and approved by next December before entering into force starting from January 2013.
