“We are ready and remain committed to support this sector and that’s why your proposals and suggestions will be integrated in an all-inclusive package which will be ready at the end of Mach to be translated into concrete policies and action,” said Economy Minister Arben Ahmetaj
TIRANA, Jan. 14 – The Albanian government says it will draft a special package to support the garment and footwear industry, one of the top employers and exporters in Albania, after a proposal to keep the corporate income tax unchanged at 10 percent for this industry was turned down in late December when the 2014 budget and the fiscal package were approved.
“We are ready and remain committed to support this sector and that’s why your proposals and suggestions will be integrated in an all-inclusive package which will be ready at the end of Mach to be translated into concrete policies and action,” said Economy Minister Arben Ahmetaj during a recent meeting with representatives of the garment and footwear sector, locally known as fa谮.
A special commission composed of representatives of garment and footwear sector and the Mnistry of Economy, Trade and Entrepreneurship will meet periodically until the new package is finalized.
The support package is expected to bring fiscal facilitation, subsidies and easier administrative procedures for the garment and footwear industry.
Exports of garment and footwear products, the traditional top Albanian exports until 2011, have overcome the crisis impacts from EU partners despite difficulty in entering new markets. Garment and footwear exports, whose overwhelming majority of more than 80 percent has Italy as its destination, grew by 11.5 percent to around 64 billion lek (Euro 448 million) in the first eleven months of this year, overcoming the slight decline in 2012.
Affected by sluggish demand by crisis-hit EU partners, garment and footwear products, the traditional top Albanian exports, were for the first time in the past 20 years of the country’s transition to a market economy overtaken by exports of “minerals, fuels and electricity.” Overwhelmingly dependant on demand from crisis-hit hit top trade partner Italy, the destination of 50 percent of total Albanian exports and 85 percent of garment and footwear products, the fa谮 industry expects 2014 to be more positive in terms of employment and manufacturing.
Data show some 470 textile companies operate in Albania currently employing around 60,000 people compared to 100,000 just before the onset of the global financial crisis. The garment and footwear industry now accounts for 30 percent of total exports, having dropped to the second most important group of exports.
Diversification of markets, considering that the majority 80 percent of these products go to Italy and the remaining share mainly to Germany and Greece is another concern for textile producers.
Some of Albania’s advantages compared to other regional and European countries include the low tax burden, minimum wage and its young population.
