Customs administration takes over excise collection

TIRANA, Oct. 1 – Starting from Oct. 1 the customs administration has taken over the collection of all excise tariffs, stripping the tax authorities of collecting excise on cigarettes, alcoholic beverages and domestically produced fuel by the ARMO refinery in an effort to improve excise collection, the second most important tax after VAT. The law approved last April amid debates foresees that the customs administration will take over the collection of all excise tariffs in line with European Union directives.
The new draft law will also be accompanied with some changes to excise rates for alcoholic beverages and tobacco. The draft law foresees the excise tariffs for beer with an alcoholic percentage with 6 percent and above will be raised by 20 percent.
The excise rate for tobacco remains unchanged at 70 lek for 20-cigarrete packets but will be collected at 3,500 lek per 1000 cigarettes in order to prevent tax evasion for 10-and 25 cigarette packets.
The draft law also obliges home producers to declare their distilling equipment used for raki and wine production foreseeing fines of up to 200,000 lek. The excise-free amounts allowed for personal consumption are 100 litres of raki and 200 litres of wine.
Excise imposed on coffee has also undergone a slight increase under the new bill. Excise on unprocessed coffee will increase from lek 30 kg to lek 140/kg the same to that processed coffee. Finance Ministry sources say the law also affects crude oil imported to be refined in Albania which will be imposed excise tax at the same level to that of refined oil which is taxed at 37/lek litre.
Opposition Socialist Party MPs opposed the new changes saying that they were being introduced in a short period and that the customs administration is not specialized to collect excise on domestic production.
However, deputy Finance Minister Alfred Rushaj argued that the customs administration has been training on this change since one year and would be more efficient in collecting excise taxes as a considerable part of raw material for domestically produced excise goods is imported and has its system computerized. “The gist of this law stands at the computerization of all procedures through an online platform for all businesses increasing both transparency and efficiency,” added the Minister.
Finance Ministry data show that despite the excise rates have been raised for several products such as tobacco and some oil products, excise revenue in 2011 rose by only 4 percent to 40 billion lek accounting for 13.3 percent of total tax revenue.
In Jan-July 2012, the excise tax imposed on the so-called luxury goods was down by 6.1 percent compared to the first eight months of 2011, revealing that Albanian have cut down on fuel, tobacco, coffee and beer consumption in these times of crisis, Finance Ministry data show.