TIRANA, July 5 – Government revenues from excise taxes during the first four months of this year were the same as last year despite an increase in several taxes and the inclusion of some other products in mid-2010. Finance Ministry data show the tax and customs administration collected 10.3 billion lek from excise taxes on fuel, alcohol, tobacco and coffee during the first four months of this year, the same as last year when the new excises were not in force.
The situation with the value added tax, the most important tax applied on all products and an indirect indicator of consumption, was the same with revenues from VAT on domestic sales dropping by 11.7 percent to 8.6 billion lek, down from 9.7 billion lek in the first four months of 2010.
In June 2010, government approved some changes to the excise law lowering excise taxes for unroasted coffee to 30 lek/kg, down from 70 lek and excluding juice and soft drinks. However, new products such as virgin oil, packaging, fireworks, tires and batteries were added to the list.
Data show total government revenues during the first four months of this year were at 103.7 billion lek, 0.8 percent down compared to a year ago. The situation continued even in May when total revenues were up by only 1 percent during the first five months of this year reaching 130.1 billion lek, forcing the government to announce budget cuts.
Tobacco revenues drop
Government revenues on tobacco registered a considerable decrease in the first four months of this year despite the excise tax on each packet of cigarettes increasing by 20 lek. Latest data published by the Finance Ministry show excise tax on cigarettes dropped by 10.5 percent to 2.9 billion lek in the first four months of this year compared to 3.3 billion lek a year ago. The Finance Ministry attributed the situation to higher imports made in the closing months of 2010 when the government announced it will raise excise tax to 70 lek per packet starting from January this year.
The new excise was approved in December 2010 in a measure aimed at discouraging the country’s high smoking rate which is expected to bring the government an extra 28 million dollars for 2011.
According to figures published by the Public Health Institute, Albania is home to the second largest number of smokers in Europe after Turkey. Data show about 40% of Albanian citizens smoke regularly. Albanians spend more than Euro 300 million on tobacco products every year.
