Govt approves new VAT law

TIRANA, Aug. 8 – The outgoing government approved this week an integral law on the value added tax, the key tax in Albania applied on almost every product at a 20 percent rate, bringing it closer to the EU legislation. Speaking at a government meeting on Wednesday, outgoing Prime Minister Sali Berisha said the law had been drafted by the best Albanian and European specialists considering its importance as a fundamental tax.
“With this law, the system undergoes further improvement in all aspects and of course it is up to the Parliament and the new majority to approve it,” said Berisha, adding that the law should also reflect changes to the lift of VAT for imports of machinery and equipment before being submitted to parliament.
Under the new fiscal package approved by Parliament, the 20 percent VAT on imported machinery and equipment has been lifted only for investments of Lek 50 mln (Euro 351,000) or more.
The new VAT draft law is expected to undergo further changes as the new Socialist Party-led government out of the June 23 general elections has pledged to lift VAT on a series of imports and reduced it for basic food products.
VAT, which accounts for around 35 percent of Albania’s total tax income, is applied at a fixed 20 percent on all products and services except for the health sector where a 10 percent VAT has been introduced on medicines and health services.