Thousands of cars entering Albania

TIRANA, Sept. 13 – The removal of customs duties for cars in late August has considerably increased their import to Albania and reduced their prices. Sources from the General Directorate of Customs say that on average some 100 cars a day have been cleared through customs since August 24, when the new law lifting customs duties for imported cars entered into force. Local traders say second-hand car prices have dropped by almost 30 percent after the import tax was lifted. Starting from September 2011, no customs duties are being applied for imported cars whose owners will only have to pay the 20 percent value added tax. The new fiscal package also introduces a new tax system for cars and increases carbon tax by 5 lek per litre starting from next September. The carbon tax for diesel, currently at 3 lek/litre will increase to 8 lek/litre while the carbon tax for petrol will rise to 6.5 lek/litre, up from 3 lek/litre currently, replacing the current traffic tax. As of January 2012, the carbon tax will increase by another 2 lek/litre or 7 lek compared to current prices, says the Finance Ministry. Government expects to collect an additional 375 million lek from carbon tax in the last four months of this year. The current annual traffic and registration taxes car owners pay have been replaced by a new formula similar to that of import in customs procedures. The new draft law excludes cars produced during the past three years from their annual taxes but applies a progressive coefficient of 0.18 for cars older than 3 years and a +0.01 coefficient for each year before. Meanwhile, the excise tax on some poor quality diesel products (Mazut and solar) will increase to 37 lek/litre the same to diesel and petrol. The changes approved in the final parliamentary session last July for this year come one week after the majority also cut the spending by 18.3 billion lek (183 million dollars) for the remaining half of this year in an effort to keeping budget deficit at 3.5 percent of the GDP and the high public debt levels at 60 percent of the GDP.