The Tourism Association demands a cut in the value added tax (VAT) from 20 percent to 8 percent and a decrease in accommodation taxes paid to local government units from 5 to 1 percent
TIRANA, Oct. 18 – The government says a comprehensive study needs to be carried out in the tourism sector to assess if the fiscal burden on these businesses is higher than in regional countries before deciding whether the VAT should be reduced or not. This is how Culture Minister Aldo Bumci answered to the perennial request by tour operators in a meeting this week with representatives of the Albanian Tourism Association (ATA). The Association demands a cut in the value added tax (VAT) from 20 percent to 8 percent and a decrease in accommodation taxes paid to local government units from 5 to 1 percent. According to Albanian tour operators, high taxes are being reflected on additional costs and more Albanians choosing to spend their holidays abroad because of competitive and often lower prices. Tour operators are also worried about the presence of urban waste in coastal areas, as well as relatively high prices of bank transactions, electricity and oil. “We are not competitive with regional countries considering that the current VAT rate is 20 percent at a time when 20 out of 27 regional countries have a VAT rate lower than 10 percent,” ATA representatives said earlier. Registration of the tourism businesses with the National Registration Center, a rating system for hotels, higher state funds on tourism better promotional campaigns and waste management were some other requests ATA made to the Tourism Ministry. Differently from what was expected, the rise in number of tourists reported by the government during the first half of this year did not produce more revenues for the tourism sector in Albania. In total, tourism revenues during the first half of this year stand at 415 million Euros, 11 million Euros less compared to the same period in 2010. Albanian tourism has grown at a significant pace over the last few years– contributing over US$ 2.4 billion in 2009 to the Albanian economy, with expectations to grow by 4% in 2011, according to statistics from the World Travel and Tourism Council. Over 200,000 Albanians are involved in tourism businesses and this number is expected to grow.
