Used car taxes increase

TIRANA, May 18 – Customs duties for used cars will increase while the one Euro tax for foreign cars will be removed, according to a government bill approved on Tuesday at the parliamentary economy committee. Under the new changes to the national tax system, the environment tax will be replaced by the tax on imported used cars whose formula of calculation has changed and is expected to bring more revenues to state budget.
The bill affects even the resale of cars within the country and will be calculated based on the engine’s horsepower, car’s production year and the kind of fuel it uses.
The new tax will be calculated by multiplying the car’s cylinder, with a fixed coefficient of 0.5 for each year of use and a fixed tariff of 25 Lek for diesel and 20 lek for petrol.
The carbon tax will treble from 0.5 lek for petrol and 1.5 lek for diesel to 1,5 lek and 3 lek, respectively.
In this way, a car produced in 1998 with an engine of 2000 cc will have to pay a customs duty of 300,000 lek (3,000 USD), but only 50,000 lek (500 USD) if the car is produced in 2008.
Meanwhile, the packaging tax has been put in the excise taxes.
The mining rent tax will also increase with 75 percent going to local going to local government
Revenues collected from import of used cars reached 2.9 billion lek last year. Officials say the taxes will be collected by customs offices in case of imports and regional road transport directorates in case of sales within Albania.
The changes to the national tax system are aimed at discouraging use of old cars in Albania and meet the Stabilization and Association Agreement (SAA) commitment of removing fixed-rate taxes for imported used cars from EU member countries.
Oil products
The Albanian government is also drafting a new law to increase the excise tax rate for some oil products. The Finance Ministry bill envisages imposing excise tax on low quality fuels used for heavy industry, agriculture and greenhouse heating which are expected to increase budget revenues by an estimated 4.3 billion Leek (43 million dollars).
Virgin oil, currently excise-free, will be taxed at 70 Leek per litre. Meanwhile, the excise tax for the kerosene will be 20 Lek per litre.
Increases are also expected for poor quality diesel, heavy oils and residual oil whose excise taxes will each be 37 Lek per litre, the same as petrol and D1, D2 diesel. Their current excise tax rate is 13 Lek per litre.
The increase will also affect cyclic and acyclic hydrocarbons including ethylene and benzene which will also each be at a 37 Lek excise tax rate per litre from 13 Lek currently.
The Finance Ministry bill envisages excise tax increases even for plastic raw materials used by export and construction industries.
Cardboard, glass, car batteries, fireworks and bulbs will be included in the excise tax scheme for the first time.