Tour Operators Demand Lower VAT Rates

TIRANA, March 23 – With two months to go before the tourism season kicks off, Albanian tour operators have complained about the amount of value added tax (VAT) they pay for hotel and restaurant services. The tour operators have called on government to review the VAT rates for hotels and restaurants, saying that the current 20 percent VAT they pay are the highest in the region.
“Currently the Albanian hotel and restaurant businesses applying the VAT regime do not offer services at competitive prices for the same quality of services compared to neighbors or other European countries,” Jak Topuzi, the President of the Accommodation Sector at the Albanian Tourism Association was quoted as saying by the daily, Shqip, on Tuesday.
Albania’s 20 percent of VAT on room prices is estimated to be 2 to 4 times higher compared to Turkey, Greece and Italy.
Apart from VAT, tour operators also complain about the 5 percent accommodation tax they pay to local governments, the relatively high prices of bank transactions, energy and oil which are making their costs more and more expensive.
“Arguments on a reduced VAT for hotels and restaurants in Albania are based on the practice that the EU is following on the reduced VAT system for its member countries,” said Topuzi, adding that hotel price levels were crucial in the competition among tourist destinations.
The tourism sector in Albania has been constantly growing during the past years. The latest Bank of Albania data show Albania’s net tourism revenues in the first nine months of 2009 reached 1.05 billion euros compared to 860 million euros during the same period of 2008.
Meanwhile, data by the National Tourism Agency show Albania was visited by 3 million people in 2009, registering a 34 percent increase compared to the previous year.
Of the 3 million tourists in 2009, only 1.78 million were foreigners. Most of them stayed in Albania for one or a few days. The remaining 1.2 million tourists were Albanian immigrants; residents in foreign countries.
Kosovo accounted for a majority of the 37 percent of foreign visitors, followed by FYROM with 17 percent, Montenegro 7 percent, Italy and Greece 6 percent each while Great Britain, Germany and Serbia with 3 percent each. Kosovo, FYROM and Montenegro have large ethnic Albanian populations and local experts often refer to this sector of the market as patriotic tourism.