TIRANA, Nov. 4 – With international oil and base metal prices at a record low affecting the country’s exports, the Albanian government has been suffering a sharp cut in income from the mining royalty, the key tax Albania collects from oil and mining production in the country.
Data published by the customs administration shows the mining royalty which is levied at a rate of 4 to 10 percent, dropped by a sharp 46.5 percent to 2.6 billion lek (€18.3 mln) in the first three quarters of this year compared to the same period in 2014, being one of the key reasons for the underperforming government revenue during this year, and registering the lowest level since 2011.
In its new fiscal package for 2016, the Albanian government is reported to have proposed some changes to the royalty tax which will no longer be levied on the export prices, but on the quantity produced and sold.
Mining royalty is currently the key tax the Albanian government collects from oil and mining companies operating in Albania, the majority of which haven’t started paying the 50 percent profit-tax yet because of being stripped of this tax until they recover their investment costs, a legal provision which has often sparked allegations of abuses.
Customs authorities say they collected 6.26 billion lek (€44 million) in mining royalties in 2014, down 30 percent compared to 2013, registering the first annual decline after several years of rapid growth.
Royalties, which range from 4 percent for non-metallic minerals, 6 percent on chromium and copper and 10 percent on oil and gas operations rose to a record 8.5 billion lek (€60 million) in 2013, up 20 percent compared to 2012, having grown by more than five time since 2009, when huge investments were made both in the oil and mining sectors.
