TIRANA, Nov. 24 – Albania’s tourism and beer industries have strongly opposed the 2016 fiscal package as increasing the tax burden on them and making them less competitive.
The travel and tourism industry, which employs around 41,000 people and accounts for 5 percent of the GDP, says the new fiscal package has not only failed to reduce the value added tax, but also increased the tax burden on most hotels by imposing a fixed accommodation rate of 1 Euro.
“We are concerned because of the fact that VAT is not being revised and the local government tax will double for some hotels, causing a new concern for the tourism industry,” says Enver Mehmeti, the head of the Albanian Tourism Association.
Both the prime minister and the tourism minister have repeatedly promised to revise VAT on tourism in the past six months, the association said.
“In an economy with a high level of informality, the high VAT rate on hotels and the tourism industry punishes fair businesses,” says ATA.
Revising the value added tax on tourism, currently at 20 percent and at the same level compared to all other goods and services, has been a perennial request by the country’s tourism industry. Operators say the high VAT rate is damaging the competitiveness of the country’s most promising industry considering that regional competitors apply differentiated VAT rates of 5 to 8 percent.
Albania’s tourism competitiveness lost considerable ground in the past couple of years on deteriorating travel and tourism policy and enabling conditions. The Adriatic country ranked 106th out of 141 countries in the 2015 Travel & Competitiveness Index, losing 29 places compared to the 2013 report.
Meanwhile, the domestic beer industry, which employs about 3,000 people and accounts for the overwhelming majority of 90 percent of domestic consumption, has also expressed its concern over the rising excise rate in the new fiscal package which favors imports.
“We are concerned over the decision to increase the excise rate which has been made without consulting us. We feel insulted about this and the government should know that we make our calculations about our staff,” said Stefan Pinguli, the head of the Association of Beer Producers.
Luan Bregasi, the head of the Biznes Albania Association, says the government should also increase the excise rate on imported beer if it decides to raise it for domestic production.
“We ask the government to revise this new burden on businesses as we have been promised a philosophy of lower taxes,” says Bregasi.
Starting January 2016, the government will impose a 400 lek (€2.85)/hectoliter excise rate on domestic beer production, up from 360 lek (€2.57)/hectoliter currently. Meanwhile, the excise rate on imported beer will drop to 600 lek (€4.3)/hectoliter, down from 710 leke (€5)/hectoliter currently.
Beer producers have earlier complained that Albania’s current tax level at 22 euros/hectoliter in tax stamps, is far higher than in Germany, the Czech Republic, Bulgaria and Greece where excise rates vary from 5 to 14 euros/hectoliter.
Back in 2011, Switzerland-based Sicpa was awarded a 10-year concession to produce and establish a tax stamps control system on tobacco, alcohol and pharmaceutical products, charging 22 euros per 1,000 beer stamps.
