New excise law to enter into force next October

TIRANA, May 28 – The excise bill which the majority approved in Parliament last week amid debates will enter into force starting from October 2012, and not next July as initially envisaged in the draft. The law foreseeing that the customs administration will take over the collection of all excise tariffs, was approved amid debates receiving a mere 68 votes from the ruling coalition, which the opposition contested as an illegal vote claiming that the law should have taken at least 71 votes from the 140-seat Parliament.
Finance Minister Ridvan Bode defended the bill as solving problems with the administration of excise taxes and being in line with European Union directives.
However, opposition Socialist Party MP and former Finance Minister Arben Malaj, said government was hurrying to adopt a bill which needs further by-laws and at a time when no changes have been made to the state budget.
“The approval of the law facilitating the administration of excise is not a step to improve what Albania gets poor marks in all indexes, and is not a step in the right direction to improve the fiscal administration in Albania tax system,” said Malaj.
Businesses have also expressed concern over the new financial guarantee they will have to pre-pay for their products on production lines, and stock products. The law foresees that businesses involved in production operations will be equipped with an electronic module at their fiscal warehouses to reflect the circulation of goods.
The draft law will strip the tax administration of collecting excise on cigarettes and alcoholic beverages and domestically produced fuel by the ARMO refinery in an effort to improve excise collection, the second most important tax after VAT.
Finance Ministry data show that despite the excise rates having been raised for several products such as tobacco and some oil products, excise revenue in 2011 rose by only 4 percent to 40 billion lek accounting for 13.3 percent of total tax revenue.
Excise tax collection during the first four months of this year rose by a mere 0.4 percent, revealing that Albanians are spending less on so-called luxury products such as fuel, tobacco, alcoholic beverages and coffee.
The new draft law will also be accompanied with some changes to excise rates for alcoholic beverages and tobacco. The draft law foresees the excise tariffs for beer with an alcoholic percentage with 6 percent and above will be raised by 20 percent.
The excise rate for tobacco remains unchanged at 70 lek for 20-cigarrete packets but will be collected at 3,500 lek per 1000 cigarettes in order to prevent tax evasion for 10-and 25 cigarette packets.
The draft law also obliges home producers to declare their distilling equipment used for raki and wine production foreseeing fines of up to 200,000 lek.