New gov’t initiative to lift VAT on agriculture imports

TIRANA, Feb. 12 – Lifting VAT on imports of machinery and inputs destined for agriculture, and paying taxes to private companies hiring newly graduates are the new initiatives Prime Minister Sali Berisha has announced ahead of the June 23 general elections as he seeks a third consecutive term with his Democratic Party.
Speaking in a press conference, Berisha said the 20 percent VAT will be lifted on every machinery and equipment destined for agriculture, livestock breeding, as well as fertilizers, seeds and saplings. He said the measure was aimed at supporting farmers by establishing new spaces for the creation and consolidation of small agricultural businesses.
To further boost employment among youth, the Prime Minister says he will strip private employers of social security contributions and cover expenditure for the qualification of newly graduates.
According to INSTAT’s 2009 labor force survey, some 21.9 percent of Albania’s youth are unemployed, and 70 percent of all young workers are exposed to informal employment.
Prime Minister Sali Berisha had earlier undertaken another step to reduce the tax burden for people receiving low wages. Speaking at a meeting with his Democratic Party MPs, Berisha said the 10 percent personal income tax, launched in 2008 as part of a flat tax reform, will be lifted for monthly wages of up to 30,000 Lek (Euro 210). The proposal by the Prime Minister comes soon after the ruling Democrats approved last December a new fiscal package which lifts VAT on investments in priority sectors, reduces taxes on coffee importers and tightens measures against informality.
Government had earlier decided to lift the 20 percent VAT on imports of machinery and equipment as well as cement and steel for the construction of hydropower plants. The 20 percent VAT on imported machinery and equipment will be lifted only for investments of Lek 50 mln (Euro 351,000) or more.